UNIVERSITY  OF  CALIFORNIA 
AT  LOS  ANGELES 


OWiVb: KSITY  of  CALIFORNM 

U>S  ANGELEa 
UBRAKY 


/ 


U.  S.  DEPARTMENT  OF  LABOR 

INFORMATION  AND  EDUCATIOxN  SERVICE 

DIVISION  OF  PUBLIC  WORKS  AND  CONSTRUCTION  DEVELOPMENT 


ECONOMICS 

OF  THE 

CONSTRUCTION 
INDUSTRY 


t\SE 


3HINGT0N 
GOVERNMapt  PRINTING  OFFICE 
1919 


U.  S.  DEPARTMENT  OF  LABOR 

INFORMATION  AND   EDUCATION  SERVICE 

DIVISION  OF  PUBLIC  WORKS  AND  CONSTRUCTION  DEVELOPMENT 


ECONOiMICS 


OF  THE 


CONSTRUCTION 
INDUSTRY 


WASHINGTON 

GOVERNMENT  PRINTING  OFFICE 

1919 


i37i5t) 


William  B.  Wil30N', 

Secretary  of  Labor, 

KoGER  W.  Babsox, 

Director  (•<  niral  Information  and  Education  Sirricc. 

Franklin'  T.  Miller, 

Director  Ditisicn  of  Fiddic  Worls  and  Construction  Development. 


=;  1  «t 


155 


i;  5  ^  A  5 


CONTEXTS. 

Page. 

Letters  of  Transmittal 7 

I.  Summary 13-17 

PiU'pose  of  Investigation 13 

Scope  and  Methods 13 

Findings 15 

II.  The  Decrease  in  the  Purchasixg  Power  of  Money 19-39 

(          '"The  Xew  Price  Revolution,"  by  Prof.  Irving  Fisher 19 

I          The  Xew  Commodity  Price  Level 23-39 

'                 ^^Tiy  prices  were  expected  to  fail  after  the  war 23 

I                 The  present  situation 24 

The  role  of  inflation 25 

The  waiting  policy  of  buyers 25 

Production  during  the  war 26 

What  the  business  man  still  fears 30 

Costs  of  production 31 

Increased  efficiency 82 

Efficiency  and  wages 33 

Demand  for  construction  materials 36 

Demand  for  consumers'  goods 37 

Conclusion : 39 

III.  Cost  and  Supply  of  Construction  Materials i 41-176 

Summary  of  Findings 41 

Acknowledgments 42 

Comparison  of  prices  of  building  materials  with  prices  of  other  com^' 

modities 42 

Comparison  of  prices  of  iron  and  steel  products  with  prices  of  building 

materials 49 

Comparison  of  war  prices  in  America  and  certain  foreign  countries 54 

Civil  Vrar  prices  and  the  Civil  War  reconstruction  period 73 

Course  of  commodity  prices  during  the  six  months  foUo^A-ing  the  armistice.  80 

Increase  of  cost  of  construction 86 

Lumber 90 

Iron  and  steel  products  used  in  construction 108 

Clay  iKoducts 110 

Quarry  products 126 

Cement 137 

Sand  and  gravel 145 

Glass 154 

Paint  materials 161 

Miscellaneous  building  materials 169 

IV.  Labor  and  Wages  in  the  Construction  Industry 177-203 

Xew  Conditions 17*' 

Attitude  of  the  Government  toward  Labor  in  the  Construction  Industry. . .  179 

Wages  and  the  Cost  of  Living 180-187 

Earnings  in  1914  and  1918 ISO 

Union  wage  rates  from  1913  to  1918 -' IS- 

L'nion  wasre  rates  in  the  building  trades  in  1914  and  191S 1S3 


4  CONTENTS. 

IV.  Lahoh  and  Waoeh  in  the  CoNSTRUcnov  Jni.usthy— Ooniiiiu«<]. 

Wa^f^H  and  C<>hI  of  Living— Oontinufd.  '"'^t'''- 

Union  wii^'o  nili-s  an<l  the  war •  -  -  183 

AdjuHtinn  wa^M«  U)  th«!  <-o8t  of  living - : .  • ...  l'S4 

lniT<\>H<;  in  the  cost  of  living '..!:!.'.:..  l^'S 

'  'oHt  of  living  and  wages  in  1918,  with  parlicnlar  reference  to  the  wage 

rate  in  the  building  trades 1)^6 

Tite  Wage  Rale  of  ]!)in 1H7 

i]Hifien<y  of  Labor  in  the  Building  TradcH 188 

V.  Sources  and  Supply  op  Capital  for  the  (Jonstruction  Industry..  205-234 

Methods  of  Supply  and  Terms  of  Real  Estate  Loans 205-215 

Temporary  and  permanent  loans 205 

]Vlethod.s  followed  in  making  luaii.s  by  banks,  title  <<>mi)anies,  building 

and  loan  lussociations,  insurance  companies 206 

Secnirity  required 210 

Rate  of  interest 210 

Duration  of  loans 211 

Terms  of  renewal 212 

Terms  of  principal  reduction 212 

Title  insurance  companies  of  New  York 213 

Torrens  system  in  New  York 214 

New  York  law  legalizing  investments  and  certiticates  when  they  cover 

unencumbered  real  estate 215 

Supply  of  Cajiital  Furnished  by  Each  of  the  Chief  Lending  Institutions.  21G-227 

Sources  of  real  estate  loans  in  1913 216 

Increase  in  real  estate  loans  by  banks,  1913-1918 216 

Increase  in  combined  real  estate  loans  of  banks,  insurance  companies, 

and  building  and  loan  associations,  1913-1918 219 

Increase  of  real  estate  loans  compared  with  various  indices  «.■'  Liiiional 

expansion 220 

Real  estate  loans  of  banks  compared  with  their  total  resour*  es 221 

Resources  of  saving  banks,  insurance  companies,  and  building  and 
loan  associations,  compared  with  resources  of  banks  other  than  sav- 
ings banks 221 

Real  estate  loans  of  New  York  banking  institutions 222 

Developments  during  1917  and  1918 227 

Factors  Tending  to  Restrict  the  Supply  of  Capital  of  Building  Enterprises 

and  Permanent  Mortgage  Loans 228-234 

Introduction 228 

War  restrictions 229 

Lack  of  standardized  methods 229 

State  laws  not  to  blame 229 

Real  estate  loans  suffer  from  discrimiuati<.>n  in  rediscounting 230 

Need  for  improved  facilities 233 

Conclusions 234 

VI.  Rdnts  and  Land  Values 235-240 

Rents  of  Ilousea  and  Apartments 235 

lousiness  Rents .    237 

Land  Values 237 

Real  Estate  Bookkeeping 238 

Yll.  Deferred  Constrvctk.in • 241 

VIII.  Bibliography 249 


CONTEXTS.  0 

LIST  OF  CHARTS. 

I.  Comparison  of  rise  in  l>uilding  materials  and  all  oilier  commodities. ....        43 
II.  Comparison  of  rise  in  building  materials  and  other  commodities 47 

III.  Comparison  of  rise  in  various  )>iulding  material  groups 48 

IV.  Relative  prices  of  pig  iron,  iron  ore,  and  coke facing  p.  52 

V.  Relative  prices  of  steel  rails facing  p.  53 

VI.  Maximum  rise  of  the  price  level  in  the  Unitt-d  Stales  and  other  coun- 
tries   57 

VII.  Comparison  of  prices  of  92  commodities,  Civil  War  and  i^rescnt  ^var 72 

VIII .  Fluctuations  of  gold  and  commodity  prices  Civil  War  period '  78 

IX.  Building  materials  prices,  Civil  War  and  present  Avar 79 

X.  The  fall  of  the  price  level  during  the  period  of  readjustment 82 

XI.  Comparison  of  price  fluctuations,  Avheat,  steel,  and  lumb^-r 107 

XII.  Relative  prices  of  steel  bars facing  p.  110 

XIII.  Average  annual  hourly  scale  of  building  trades 202 

XIV.  Increase  of  c<  et  of  living  compared  with  union  wage  scale 203 


LETTERS  OF  TRANSMITTAL. 


U.  S.  Department  of  Labor, 

IXFORMATIOX    AND   EDUCATION    SERVICE, 

Washington,  June  24,  1019. 

Sir:  Immediately  after  the  armistice  was  signed,  you  asked  me 
to  do  what  was  possible  to  prepare  the  country  for  the  readjustment 
period  and  see  that  work  was  provided  for  the  returning  soldiei^. 
You  asked  if  this  organization,  which  had  been  directing  its  energy 
to  getting  the  country  from  a  peace  to  a  war  basis,  could  not  be 
also  used  for  getting  the  country  from  a  war  to  a  peace  basis. 

I  immediately  took  the  matter  up  with  my  associate,  Mr.  Ernest  T. 
Gundlach,  and  my  assistants.  It  was  decided  to  organize  a  Division 
of  Public  Works  and  Construction  Development  and  make  Mr. 
Franlvlin  T.  Miller  director  thereof.  Mr.  Miller  since  early  in  August 
had  been  serving  us  in  connection  with  some  important  work.  His 
knowledge  of  the  Department  of  Labor,  combined  with  his  other 
special  qualifications,  made  him  an  ideal  man  for  this  task. 

The  building  industry  was  the  one  great  industry  in  the  country 
which  offered  the  greatest  opportunities  for  expansion,  it  having 
been  the  one  industry  which  had  been  especially  suppressed  during 
the  war.  Moreover,  the  building  of  homes  adds  both  to  the  per- 
manent wealth  of  the  country  and  also  has  certain  social  features 
which  are  of  inestimable  value.  I  remember  that  you  yourself  once 
said:  "A  man  was  never  known  to  hang  the  red  flag  of  anarchy  over 
his  own  hearthstone." 

Of  course  the  Information  and  Education  Service  does  not  take 
the  credit  of  reviving  industry  and  bringing  about  the  remarkably 
smooth  change  from  war  to  peace  work  which  the  Nation  has  wit- 
nessed. Many  individuals  and  organizations  had  a  part  in  this 
great  effort  and  the  credit  belongs  to  all  jointly.  I  do,  however, 
^Ir.  Secretary,  feel  that  the  greatest  share  of  this  belongs  to  you 
and  the  Department  of  Labor.  As  you  were  the  greatest  means  in 
interesting  labor  in  the  war  and  keeping  the  boys  at  the  front  sup- 
plied with  food,  clothing,  and  ammunition,  so  you  were  likewise 
the  greatest  factor  in  the  readjustment  period  following,  supplying 
work  for  the  boys  upon  their  return. 

The  work  has  now  been  completed  and  we  arc  to-day  closing  up 
the  service.  In  connection  with  this  work  we  have,  however,  col- 
lected some  most  valuable  data  which  should  be  of  great  use  in 


8  LETTER   OF   TRANSMITTAL. 

\«  JUS  to  ( .mic  to  j»ll  iiitcrostod  in  tlio  ImiUling  of  public  works  and 
oiistnntion  <rriHMjiJly.  TJiis  <lata  Ims  hoon  collaboratod  and  put 
n  ]»oinirtn<'Mt  form  \*\  Mr.  MiJlor  and  his  assistants,  Dr.  M.  A.  Mikkol- 
<*'u,  Dr.  E.  J.  Clapp,  Dr.  John  Whyto,  Mr.  T.  S.  Holdrn,  and  others. 
]t  is  this  data  whi<h  I  herewith  submit  to  you  as  the  last  act  of  the 
Information  and  Edu*  ation  Service.  I  believe  that  tlie  book  should 
be  in  the  ha)ids  of  every  Federal,  State,  municipal,  and  town  ofFicial 
who  ])as  ill  contemplation  ajiy  public  work,  as  well  as  in  the  hands 
<'f  jdl  arrhite*  ts.  })uilders,  and  others  i))terested  in  construction 
<lcv<'lopment. 

1  also  take  this  ^H(•s^^i(.]^  of  thanking  you  for  the  privilege  of  work- 

.,g  with  the  department  during  the  past  year.     You  have  given 

iiic  the  pleasantest  year  of  my  life,  for  I  have  been  able  to  feel  that 

jt  Inis  been  a  year  of  usefulness.     Furthermore  I  have  learned  much 

from  you  the  value  <>f  v.hich  I  can  never  overestimate. 

Let  me  also  add  my  acknowledgments  to  Mr.  Ernest  T.  Gundlach, 
Mr.  George  W.  Coleman^  Dr.  Davis  R.  Dewey,  Mr.  Frank  T.  Hawley, 
Mi-s.  Clara  Sears  Taylor,  and  Mr.  Robert  C.  Starr,  who  has  most 
'  Jhciently  served  as  chief  clerk,  and  all  division  chiefs,  assistants, 
lerks,  and  others  who  have  been  connected  with  the  work.  If  it  is 
:.ot  out  of  place,  I  shotdd  like  also  to  take  this  opportimity  of  thank- 
ing Mr.  H.  L.  Kerwin,  Director  of  Conciliation,  and  Mr.  Edward  S. 
McGraw,  yoiu'  private  secretary,  and  the  other  men  in  your  office; 
hlso  your  most  efficient  chief  clerk,  Mr.  Samuel  J.  Gompers,  and  Mi-. 
31.  A.  Works,  Chief  of  the  Division  of  Publications  and  Supplies,  to 
all  of  whom  I  am  under  the  deepest  obligations  for  aid  in  the  j^ub- 
ijcation  of  this  volume. 

Respectfully,  yours, 

Roger  W.  Babson, 

Director  General. 
3Ion.  W.  E.  Wilson, 

Secretary  of  Lalor,  ^fas7(ingion,  D.  C. 


U.  S.  Department  of  Labor, 
Information  and  Education  Service, 

Wasl(ln(jion,  June  30,  1919. 

Sir:  In  accordance  with  a  letter  of  instruction  from  the  Secretary 
<  (  Labor,  the  Division  of  Public  Works  and  Construction  Develop- 
ment was  organized  December  30, 1918,  in  the  Information  and  Educa- 
tion Service  «>f  the  War  Labor  Administration  of  the  Department  of 
Labor. 

The  fundi- ►n  «>f  tlie  Information  and  Education  Service  had  been 
i«»  facilitate  by  means  of  educational  publicity  the  transfer  of  labor 
iiUtl  industn^  from  peace  to  war  production.     When  the  armistice 


LETTER    OF    TRAXSMITTAL.  9 

was  signed  and  hostilities  ceased,  it  clearly  became  the  duty  of  the 
Information  and  Education  Service  to  employ  its  means  of  publicity 
toward  a  restoration  of  labor  and  industry  to  a  peace  footing. 

Of  the  larger  industries  of  the  countiy  the  one  which  had  been  most 
severely  curtailed  was  the  construction  industiy,  embracing  public 
work  and  private  building.  Its  prompt  return  to  a  condition  of 
activity  was  a  matter  of  public  interest  (1 )  in  order  to  ameliorate  the 
shortage  of  housing  and  of  other  private  buildings,  which  was  causing 
high  rents  and  affecting  the  cost  of  living  and  of  production;  (2)  in 
order  to  supply  the  deficiency  in  schools,  hospitals,  roads,  water  sup- 
plies, local  transit,  and  other  public  and  semipublic  utilities,  the  con- 
struction of  which  and,  in  many  cases,  the  repair  of  which  had  been 
wholly  or  partly  discontinued  during  the  war;  (3)  in  order  to  furnish 
employment  to  demobilized  soldiers  and  industrial  workers  during 
the  period  of  readjustment  of  the  manufacturing  industries. 

The  Secretaiy  of  Labor,  therefore,  in  his  letter  of  December  20, 
1918,  directed  that  particular  effort  be  made  through  educational 
publicity  to  facilitate  the  rehabilitation  of  the  construction  industiy 
or,  in  the  phrase  of  the  letter,  "to  stimulate  the  interest  of  the  Nation 
in  public  and  private  construction"';  and  authorized  the  formation 
of  the  Division  of  Public  Works  and  Construction  Development  for 
this  purpose. 

Tlirough  tlie  cooperation  of  the  Writers',  Speakeis',  Posters',  and 
Industrial  Plants  Divisions,  already  in  existence  as  luiits  of  the 
Information  and  Education  Service,  the  new  division  was  assured  a 
staff  of  men  and  women  experienced  in  the  methods  of  popidar 
education,  and  it  was  necessary  for  the  new  division  but  to  supple- 
ment the  Writers'  Section  and  to  organize  Correspondence  "Own- 
Your-Own-Home  "  and  Economics  Sections. 

So  that  the  work  of  education  undertaken  by  the  division  might 
be  soiind,  complete,  and  of  substantial  value  to  the  country,  it  was 
decided  to  investigate  the  economic  conditions  aft'ecting  the  construc- 
tion industry.  The  investigation  was  intrusted  to  the  Economics 
Section,  created  for  the  purpose  and  containing  the  followmg  per- 
sonnel: Edwin  J.  Clapp  (Ph.  D.,  formerly  professor  of  economics  in 
New  York  University)  and  Michael  A.  Mikkelsen  (Ph.  D.,  editor  of 
the  Architectural  Record),  associate  directors;  AVarren  Case  (civil 
engineer),  Everett  Dominick  (A.  B.),  Thomas  S.  Holden  (architect), 
Augustus  P.  Norton  (A.  M.),  Catherine  J.  Paine  (A.  M.),  L.  A. 
Rufener  (Ph.  D.),  and  John  Wliyte  (Ph.  D.),  staff  members.  The 
various  phases  of  the  investigation  of  the  staff'  of  the  Economics 
Section  were  supplemented  and  checked  by  competent  specialists. 

From  the  investigation  by  the  Economics  Section  it  became 
apparent  that  the  general  commodity  price  level  as  it  stood  lour 


1Q  I.KTIKH    OK    THANSMITTAL, 

iiumtlis  aflor  tlio  armistice  coiild  not  be  expected  to  recede  much, 
if  at  all,  ill  tlio  luuir  future;  tliat  the  rise  in  the  "cost  of  construction" 
was  fully  i20  ])cr  cent  less  tliun  t!io  rise  in  the  general  commodity 
])rice  level;  and  that  there  luid  i)ractically  been  no  advance  whatever 
ill  urban  land  values. 

As  soon  as  these  iindings,  with  tiic  evidence  supporting  them,  were 
made  known  the  chief  obstacle  to  a  prompt  revival  of  the  construction 
industry,  namely,  the  exfjcctation  of  an  impending  fall  in  prices  and 
wages,  was  removed;  and  construction  activity  rose  in  April  to 
proportions  comparable  with  the  record  for  corresponding  prewar 
months,  and  hjis  since  continued  to  rise. 

However,  the  present  volume  of  constniction  is  n(jt  sufficient  to 
remedy  the  acute  shortage  of  housing  which  has  been  brouglit  about 
by  more  than  four  years  of  subnormal  buikUng.  A  large  part  of  it 
consists  of  the  smaller  classes  and  of  remodeling  work  on  existing, 
long  neglected  buildings;  and  in  spite  of  relatively  large  expenditures 
in  the  construction  industry,  it  may  be  doubted  whether  the  pro- 
vision of  new  buildmgs  this  year  wUl  be  adequate  even  to  care  for 
the  current  annual  growth  in  population  and  industry. 

The  required  provision  of  new  buildmgs  is  prevented  by  insuffi- 
•ciency  of  money  available  for  real-estate  loans.  The  investigation 
by  the  Economics  Section  brouglit  out  the  disquiethig  fact  that  the 
growth  m  resources  of  those  savings  and  investment  institutions 
which  lend  money  on  real  estate  has  not  kept  pace  either  with  the 
Sfrowth  m  resources  of  commercial  banks  or  with  the  increase  in 
national  wealth.  Furthermore,  a  large  proportion  of  the  resources 
of  those  savings  and  investment  institutions  which  lend  money  on 
real  estate  has  become  fixed  in  Government  securities. 

Insufficiency  of  mortgage-loan  capital  is  mthout  doubt  the  chief 
present  obstacle  to  elimmation  of  the  housing  shortage.  This 
insufficiency  might  be  temporarily  overcome  by  the  exemption  of 
limited  amounts  of  mortgage  loans  from  mcome  taxation. 

The  danger  that  the  shortage  may  be  contmued,  if  not,  indeed, 
increased,  induces  me  to  recommend  that  a  congressional  committee 
be  requested  to  investigate  fidl^''  the  causes  of  the  insufficiency  of 
mortgage  loan  capital  to  meet  the  country's  need  for  new  buildings 
and  to  devise  remediid  legislation. 

Meanwhile,  hi  order  that  a  partial  remed}*  might  be  at  once  avail- 
able, the  Division  of  Public  Works  and  Construction  Development 
has  cooperated  with  the  legislative  committee  of  the  United  States 
League  of  Local  Building  and  Loan  Associations  in  preparing  the 
horae-loau  bank  bill  introduced  in  the  Senate  by  Senator  Calder. 
The  budding  and  loan  associations  are  an  important  factor  in  the 
constniction   of  small  homes;  and   the  facilities  for  rediscounting 


LETTER    OF    TRANSMITTAL.  11 

mortgages  which  they  ask  for  in  the  home-loan  bank  bill  would 
greatly  advance  the  cause  promoted  by  the  OwTi-Your-Own-IIome 
Section  of  the  Division  of  Public  Works  and  Construction  Develop- 
ment. A  more  immediate  though  partial  remedy  would  be  the 
exemption  from  income  tax  of  the  interest  received  from  real  estate 
mortgages  within  proper  limitations  as  to  interest  bearing  rate  of  the 
mortgages  and  as  to  amounts  for  which  exemption  might  be  allowed 
to  each  individual. 

I  beg  leave  to  transmit  herewith  the  report  of  the  Economics 
Section  and  to.  recommend  its  publication. 
Yours,  very  truly, 

F.  T.  Miller, 
Director,  Division  ofPuhlic  Worlcs  and  Construction  Development. 
Roger  W.  Babsok, 

Director  General,  Information  and  Education  Service, 

U.  S.  Department  of  Labor,  Washington,  D.  0.  * 


ECONOMICS  OF  THE  CONSTRUCTION  INDUSTRY. 


I.  SUMMARY. 

PURPOSE  OF  INVESTIGATION. 

The  iiistruc.tioiis  received  by  the  Economics  Section  cnllcii  for  an 
investigation  of  those  general  economic  f  actore  which,  taken  together, 
determine  the  financial  success  or  failure  of  a  prospective  investment 
in  improved  real  estate  and  which,  consequejitly,  investors  are  in  the 
habit  of  considering  before  undertaking  the  improvement  of  real 
estate.  The  division  was  organized  to  ''stimulate  tlie  interest  of  the 
Nation  in  public  and  private  construction  "  with  a  view  to  the  creation 
of  buffer  employment  for  labor  during  the  period  of  transition  of 
manufacturing  industries  from  war  to  peace  production.  It  was 
feasible  and  proper  to  stimulate  interest  in  public  construction  on 
other  grounds  than  financial  profit;  but  as  the  responsibility  for  pro- 
viding buffer  employment  was  a  responsibility  of  swiety  as  a  whole, 
it  was  felt  that  the  individual  investor  should  not  be  urged  to  build 
except  in  obedience  to  normal  private  considerations.  These  differ 
somewhat  according  to  the  type  of  construction  contemplated,  but 
the  mxost  important  is  financial  profit.  It  v.-as  decided,  therefore,  that 
stimulation  of  private  construction  should  take  the  form  of  supplying 
authentic  data  to  assist  the  individual  investor  to  judge  for  himself 
whether  or  not  it  would  be  profitable  for  him  to  build. 

SCOPE  AND  METHODS. 

The  provision  of  such  data  meant  an  investigation  of  the  volume  of 
deferred  construction,  of  the  recent  com*se  of  construction-material 
prices,  of  wages  in  the  construction  industry,  of  land  values  and  rents, 
and  of  mortgage-loan  conditions.  As  the  financial  soundness  of  a 
present  investment  in  improved  real  estate  depends  upon  future 
earnings,  an  investigation  of  the  economic  factors  just  mentioned 
would  have  no  practical  value  unless  it  revealed  future  tendencies. 
It  was  necessary  therefore  to  compare  prices  and  wages  in  the  con- 
struction industry  with  prices  and  wages  in  general  industry  in  order 
to  show  Vvhether  the  former  were  relatively  high  or  low,  and  hence 
likely  to  recede  or  advance  in  the  process  of  adjustment  to  the  genertJ 
price  level.  It  was  necessary,  further,  to  identify  the  principal  causes 
of  the  rise  in  prices  and  wages  during  tlie  war  in  order  to  balance 

13 


14  HCOXOMICS    OF    THK    COXSTIirCTIOX    IXDISTIIV. 

lli()>('  tlii\(  ^v(•^(•  imrcly  Iciiiporary  against  tliosc  lli:;t  in  the  altered 
ocoiioniic,  coiulitioiis  ])?'()ii<j:lit  iilx.iil  ])y  llio  var  must  Ix'  poinianent 
or  scinipormaruMit. 

Tlioinvostigation,vliile  covering' a  ratlicrwide  field, required  neither 
minute  nor  exacting  roscarcli.  It  was  extensive  rather  than  inten- 
sive, desiirned  <o  meet  a  definite  trade  demand  for  the  latest  informa- 
tion  of  a  kind  whicli  (lie  trade  habitually  uses.  Most  of  the  desired 
inrormalion,  principally  of  a  statistictil  nature,  was  already  in  exist- 
ence, collected  by  departments  and  bureaus  of  the  Government  but 
not  selected  and  compiled  for  our  special  purpose;  and  the  rest  was 
obtainable  tlnough  questionnaires.  Reeognizing  the  urgent  nature 
of  the  investigation  by  this  section,  the  various  Government  depart- 
ments and  bureaus  rendered  assistance  freely,  in  not  a  few  instances 
permitting  transcripts  to  be  made  of  statistics  and  reports  awaiting 
publication.  Tliis  section,  in  turn,  promptly  released  for  pubhcity 
by  the  division  all  information  of  value  which  it  received. 

The  chief  diiTiculty  connected  with  the  investigation  was  the  short 
time  available.  If  it  was  to  serve  the  purpose  set  for  it,  the  essentials 
of  the  investigation  would  have  to  be  finished  in  two  months,  by  the 
1st  of  ]\rarch.  This  was  accomplished,  and  the  present  report  is  sub- 
stantially a  collection  of  papers,  extended  and  amphficd,  which  were 
used  as  sources  for  publicity  by  the  division  before  March  1,  1919. 

In  the  course  of  the  investigation,  it  became  apparent  that  the 
principal  cause  of  the  rise  in  prices  since  the  beginning  of  the  war  in 
Europe,  and  particularly  since  the  entry  of  the  United  States  into  the 
war,  is  the  depreciation  which  has  taken  place  in  the  value  of  money, 
and  that  this  depreciation  is  relatively  permanent.  The  high  cost  of 
everything,  all  over  the  world,  is  primarily  a  monetary  phenomenon. 
As  to  this  matter,  the  opinion  of  Prof.  Irving  Fisher  was  sought;  and 
and  upon  request  Prof.  Fisher  supplemented  his  oral  confirmation  ^\•ith 
a  paper  entitled  ''The  New  Price  Revolution,"  which  pointed  out  the 
war  changes  in  the  circulating  media  of  this  and  other  countries,  ex- 
plained their  effect  upon  the  price  levels  here  and  abroad,  and  de- 
clared his  conviction  that  the  general  level  of  prices  as  it  stood  on 
March  1,  1919,  "is  not  going  to  fall  much,  if  at  all"  (The  price  levels 
reached  upward  in  March  and  continued  to  advance  up  to  July  1, 
1919,  when  this  report  went  to  press.)  A  higher  price  level  of  course 
means  a  higher  wage  level,  because  it  means  a  higher  cost  of  living. 

Prof.  Fisher's  paper  was  ready  for  release  on  March  3,  1919,  and 
owing  to  the  great  weight  of  his  authority  on  prices,  the  daily  news- 
papers and  trade  papei^s  gave  wide  pubhcity  to  the  substance  of  his 
statement.  Within  six  weeks  the  division  had  sent  out  200,000  copies 
of  this  paper,  mostly  in  response  to  requests  by  bankers,  manu- 
facturei-s,  and  business  men  who  had  seen  reference  to  it  and  who 
wished  to  distribute  it  among  their  customei-s.     Prof.  Fisher's  mono- 


ECONOMICS   OF   THE    COXSTRUCTIOX   INDrSTRY, 


15 


graph  has  done  much  to  dissipate  fallacies  as  to  the  temporary  nature 
of  the  present  price  level. 

FINDINGS. 

The  more  important  findings  of  the  investigation  are  the  following : 

1.  As  to  deferred  construction. 

A  questionnaire  relating  to  projects  for  which  plans  had  been  drawn 
but  for  vrhich  contracts  had  not  been  let  prior  to  the  armistico  was 
sent  out  in  January  to  15,000  architects,  engineers,  public  officials, 
and  others.  The  replies  disclosed  6,472  deferred  projects,  estimated 
to  cost  $1,711,802,000,  divided  into  3,378  projects,  valued  at 
$481,062,000,  for  private  owners,  and  3,094  projects,  valued  at 
$1,230,740,000,  for  political  and  public-utilities  corporations. 

2.  As  to  recent  construction. 

The  most  complete  construction  statistics  available  cover  contracts 
let  for  engineering  and  building  construction  north  of  the  Ohio  and 
east  of  the  Missouri,  together  with  some  adjacent  area,  containing 
four-sevenths  of  the  population  of  the  country. 

The  contracts  let  in  the  first  six  months  of  1919,  compared  with 
1915  and  1916,  run  as  follows: 


January . . 
February. 

March 

April 

May 

Jane 


1919 


$51,000,000 
95, 000, 000 
110,000,000 
192.000,000 
245,000,000 
299,000,000 


1915  « 


1916  a 


$70,000,000 
79, 000, 000 
122,600,000 
124,000.000 
125,000,000 
149.000,000 


$87, 000, 000 
92, 000,  OtIO 
131,000,00<J 
140.000,000 
1X2,000.0-10 
195.000,000 


a  Costs  brought  up  to  1919  price  level. 

3.  As  to  prices  of  construction  materials. 

In  April,  1919,  the  index  number  of  construction  materials,  includ- 
ing steel,  was  98  per  cent  higher  than  in  the  year  ended  June  30,  1914 ; 
excluding  steel,  it  was  84  per  cent  higher. 

Tlie  mdex  number  for  commodities  in  general  was  10  ])er  cent 
higher  in  April,  1919,  than  in  the  year  preceding  the  war. 

Tliat  is,  building-materials  prices  have  risen  less  rapidly  than  the 
general  price  level.  If  the  price  level  stays  up,  the  cost  of  building 
materials  can  not  well  fall. 

4.  As  to  wages  in  the  construction  industry. 

The  mdex  number  for  union  wage  scales  in  41  leading  cities  shows 
an  advance  of  28.5  per  cent  since  1914.  This  percentage  of  advance 
is  less  than  the  percentage  of  advance  in  the  cost  of  livmg  or  iu 
wages  in  certain  other  industries. 

That  is,  if  the  cost  of  living  and  the  general  wage  scale  stay  up,  the 
cost  of  buildmo'-construction  labor  can  not  well  fall. 


16  EiONOMK'."^    OF    THi:    CONSTRUCTION    INDI'STRY. 

r>.  Ak  (o  cost  of  ronslruction. 

The  mcroasc  i?i  tlio  <ost  <»f  «-oiistni(  tiou  varies  with  the  type  of 
projcrt.  It  is  s<.m(\vliiit,  more  tliaii  SO  per  cent  for  a  liigh-^ade  steel 
skeleton  ollice  building  iiixlsoiiH'Avliiit  less  than  .jO  per  cent  for  (hvelling 
limises  and  otlicr  builjlings  in  wliich  tlie  metals  group  of  materials  is 
not,  so  largely  represented.  It  should  ])e  noted  that  neither  of  tliese 
increases  is  so  great  as  the  increase  in  ]>ricos  in  general,  as  indicated  hy 
commodity  index  numbers. 

6.  As  to  land  values  and  rents. 

A  cpiestionnaire  sent  ont  in  December  brought  rephcs  from  real 
estate  boards  hi  91  cities.  In  52  of  the  cities  rents  of  residence 
liousing  (private  dweUings,  apartments,  tenements)  had  advanced  10 
per  cent  or  more,  in  some  instances  40  per  cent  to  50  per  cent. 

Advances  in  rents  of  other  kinds  of  property  were  unimportant. 

The  market  values  of  house  sites  had  declined  in  six  cities  and  had 
remained  practically  stationary  in  72. 

Later  information  on  rents  and  land  values  was  sought  through  a 
<luestionnaire  sent  to  150  real  estate  boards  throughout  the  country. 
Replies  to  this  questionnaire  were  not  returned  in  time  to  be  of  use 
in  this  report. 

In  general,  it  appears  tliat  rents,  which  have  risen  less  rapidly 
:]ian  constniction  costs,  are  continuing  to  rise  because  of  shortage 
of  buildings. 

7.  As  to  mortgage  loans. 

Tlie  main  sources  of  real  e.state  loans  are  savings  banks,  insurance 
companies,  and  building  and  loan  associations.  Savings  banks,  in- 
surance companies,  and  building  and  loan  associations  have  not 
gi'own  so  rapidly  in  resources  as  banks,  other  tlian  savings  banks, 
since  1913. 

The  country's  finances  are  well  organized  to  serve  (a)  commercial 
needs,  by  commercial  loans,  the  process  being  facilitated  by  the  redis- 
coimt  privileges  of  the  Federal  Reserve  banks;  and  (&)  long-terra 
investment  needs,  by  securities  of  guaranteed  worth  and  of  universal 
salabihty. 

The  <ountry's  finances  are  not  well  organized  to  supph*  tlie  demand 
for  building  capital  through  mortgages,  the  type  of  security  almost 
iniiversally  used  for  obtaining  such  capital.  The  average  mortgage 
is  not  of  guaranteed  worth,  nor  is  it  readily  salable.  Properly  to 
finance  the  building  industry,  the  standard  form  of  long-term  invest^ 
ment,  namely,  bonds,  should  be  utilized  more  freely.  Institutions 
nre  needed  to  hypothecate  real  estate  mortgages  and  issue  bonds 
against  them.  This  has  been  done  for  farm  mortgages  tlirough  the 
Federal   farm   loan   banks;  it   is   proposed   for  buildmg  mortgages 


ECONOMICS    OF    THE    CONSTEUCTION    INDUSTRY.  17 

tiirougli  liome  loan  banks  and  a  proposed  Federal  mortgage  bank. 
In  that  direction  lies  t\m  best  hope  of  the  building  industry  for 
recovering  the  use  of  its  former  share  of  the  Nation's  capital.  Another 
measure  that  has  been  urged  on  Congress  is  the  exemption  of  limited 
am  omits  of  mortgage  loans  from  the  operation  of  the  income  tax, 
to  the  end  that  these  securities  shall  net  as  great  a  return  to  the  in- 
vestor as  municipal  bonds,  Government  bonds,  farm  loan  bonds,  and 
other  similarly  exempted  investments. 
121297°— 19 2 


Jlir. 


II,  THE  DECREASE  IN  THE  PURCHASING  POWER  OF  MONEY. 

THE  NEW  PRICE  REVOLUTION." 

By  Irving  Fisher, 
Professor  of  Political  Economii ,   Yale  University. 


At  the  present  time  there  is  a  marked  halt  in  production.  Industry  is  slowing  down. 
Unemployment  of  labor  increases.  Some  industrial  concerns  are  failing  to  earn 
profits  and  others  are  suffering  the  dissipation  of  their  accrued  profits,  because  even 
by  shutting  theu-  plants  down,  they  can  not  save  certain  of  their  expenses  or  any  of 
their  fixed  charges.  The  Government's  revenues,  dependent  as  they  are  upon  the 
national  income,  may  fall  short  at  the  very  time  we  need  them  most.  In  brief,  we  are 
threatened  with  a  widespread  business  depression,  and  from  peculiar  causes,  for  the 
unsound  conditions  usually  preceding  a  widespread  business  depression  are  absent. 

Belief  that  prices  must  drop. — The  main  reason  why  business  is  not  going  ahead 
better  is  that  most  people  expect  prices  to  drop.  The  merchant  is  selling,  but  not 
buying.  The  manufacturer  holds  up  the  purchase  of  his  raw  materials.  People 
quote  the  disparity  between  present  prices  and  those  prevailing  "before  the  war," 
and  decide  they  will  not  buy  much  until  present  prices  get  down  to  '  'normal.  "  This 
general  conviction  that  prices  are  sure  to  drop  is  putting  a  brake  upon  the  entire 
machinery  of  production  and  distribution.  Readjustment  waits  because  we  keep 
on  waiting  for  it.  '  We  have  waited  in  vain  for  over  three  months.  It  is  interesting 
to  observe  that  many  manufacturers  think  that  prices  must  come  down,  including 
the  price  of  labor;  but  they  are  ready  to  demonstrate  to  you  that  their  own  prices 
can  not  come  down,  nor  can  they  pay  lower  wages.  Almost  everything  they  buy 
somehow  costs  twice  as  much  as  before  the  war,  and  their  labor  is  twice  as  dear.  They 
can  not  pay  then'  labor  less  if  labor  is  to  meet  the  increased  cost  of  living.  Now,  as  a 
matter  of  fact,  when  we  investigate  almost  any  individual  one  of  the  so-called  high 
prices  for  industrial  products  we  are  likely  to  find  that  individually  it  is  not  high; 
that  is,  it  is  not  high  relatively  to  the  rest.  Our  quan-el  is  with  the  general  level  of 
prices. 

The  general  price  level.^ Variations  in  the  general  price  level  may  be  compared 
to  the  tides  of  the  sea,  while  individual  prices  may  be  compared  to  waves.  Individual 
prices  may  vary  from  this  general  level  of  prices  for  specific  reasons  peculiar  to  indiv- 
idual industries,  just  as  the  height  and  depth  of  waves  vary  from  the  general  level 
established  by  the  tide.  The  causes  controlling  the  general  price  level  are  as  distinct 
from  those  controlling  individual  prices  as  the  causes  controlling  the  tides  are  distinct 
from  those  controlling  individual  waves. 

Individual  versus  universal  price  influences. -AH  prices  ha\e  risen,  but  some 
have  risen  more,  some  less,  than  the  average,  for  particular  reasons  affecting  each 
industry.  In  some  cases  an  improved  organization  of  both  employers  and  employees 
has  enabled  them  to  combine  against  the  public  and  take  full  advantage  of  the  price 
advance.  The  war  brought  about  an  abnormal  demand  for  certain  products,  like 
copper  and  steel,  and  they  advanced  faster  than  the  average.     The  abnormal  demand 

'  Written  for  the  U.  S.  Department  of  Lafxir  and  originally  published  as  a  separate  bulletin  of  the 
Di\-ision  of  I'ublic  Works  and  Construction  Development. 

19 


20  KCONOMirS    OF    TIIK    CONSTRUCTION    INDUSTRY. 

liiiviiiu'  (lisn|>|)f;in(l,  ilic.-c  |)rircH  an'  Ix-iiif;  a'ljiiHtcd  downward.  A\Tieat  in  a  case 
wlun-  (Icinaiid  iiicrcaxcd  and  al.  tho  name  I  iino  rcrtain  of  the  usual  Hourccs  of  supply — 
KiiMHiu,  AuHtralia,  and  Art,'fii(ina-  diHapixan-d,  with  a  rcKullant  abnormal  price 
increase.  The  doHod  houhch  of  Hupply  have  opened  again,  and  wheat  prices  in  the 
world  market  have  dropped.  In  Kome  caseH,  a.s  in  many  of  the  indu.stries  making 
buildiiit,'  materiai.s,  (he  war  meant  a  {,Tr<'at  nlackening  in  demand,  an  enforced  curtaU- 
nieiit  in  uhc  by  Government  order.  In  Huch  in.stances  we  are  likely  to  eee  an  upward 
ewinp  in  prices  an  the  euppreased  demand  again  makes  itnelf  felt.  To-day  we  are 
witneswing  throughout  the  country  such  price  readjustments,  up  and  down,  but  the 
general  price  level  has  shown  little  sign  of  falling,  as  is  evidenced  by  price  index 
numbers.  It  is  apparent  to  every  thoughtful  observer  that  some  great  force  has 
affecti'd  all  prices,  creating  a  new  standard  to  which  they  are  all  conforming. 

The  fundam/'utal  practical  question  confronting  business  men  is  whether  the 
general  level  of  prices  is  going  to  fall.  In  my  opinion,  it  is  not  going  to  fall  much,  if 
at  all.  We  are  on  a  i)ermanently  higher  price  level,  and  the  sooner  the  businessmen 
of  the  country  take  this  view  and  adjust  themselves  to  it  the  sooner  will  they  save 
themselves  and  the  Nation  fnjm  the  misfortune  which  will  come  if  we  persist  in  our 
present  false  hope. 

Its  dependence  upon  the  circulating  medium.— The  general  level  of  prices  is 
dependent  upon  the  volume  and  rapidity  of  turnover  of  the  circulating  medium  in 
relation  to  the  business  to  be  transacted  thereby.  If  the  number  of  dollars  circulated 
by  ca.sh  and  by  check  doubles  while  the  number  of  goods  and  services  exchanged 
thereby  remains  constant,  prices  will  about  double. 

The  great  price  changes  in  history  have  come  about  in  just  this  manner.  The 
"price  revolution"  of  the  sixteenth  century  came  upon  Europe  as  a  result  of  the 
great  influx  of  gold  and  silver  from  the  mines  of  the  New  World.  Europe  was  flooded 
with  new  money.  More  countere  were  used  than  before  in  effecting  exchanges,  and 
prices  became  "high."  People  talked  then  of  temporary  "inflation,"  just  as  tliey 
talk  of  it  now.     But  it  was  not  temporary-;  it  was  a  new  price  level.  • 

A  similar  increase  in  prices  all  over  the  world  occurred  between  1896  and  1914, 
following  the  discovery  of  the  rich  gold  fields  of  South  Africa,  Cripple  Creek,  and 
Alaska,  the  invention  of  the  cyanide  process  in  mining,  and  the  va.st  extension  of  the 
use  of  bank  credit. 

Exten.sion  of  credits. — Circulating  credit — that  is,  bank  deposits  subject  to  check 
and  bank  notes — is  a  multiple  of  the  banking  reserve  behind  these  deposits  and  notes; 
and  the  essence  of  this  reserve  is  gold.  Our  present  monetary  system  is  an  inverted 
pyramid,  gold  being  the  small  base  and  bank  notes  and  deposits  being  the  large  super- 
structure. The  superstructure  grows  even  faster  than  the  base.  The  deposits  are  the 
important  elements.  They  are  transfeiTed  by  check  from  one  individual  to  another; 
that  is,  the  circulation  of  checks  is  really  the  circulation  of  deposits. 

Thus  any  increase  in  the  country- 's  gold  supply  has  a  multiplied  effect.  The  possible 
extent  of  that  effect  is  dependent  upon  (1)  the  amount  of  gold  available,  and  (2)  the 
gold  reserve  requirements,  determining  the  volume  of  credit  that  can  be  put  into 
circulation  based  upon  the  gold.  Over  a  billion  dollars  in  gold  has  come  into  this 
country  from  abroad  since  1914,  and  a  large  amount  has  disappeared  from  domestic 
circulation.  The  gold  from  both  these  sources  has  found  its  way  into  the  United 
States  Treasury  and  into  bank  reserves.  On  June  30,  1918,  the  portion  of  the  gold 
reserve  of  the  Federal  reserve  banking  system  wliich  supported  national  bank  deposits 
and  Federal  reserve  notes  was  more  than  three  times  as  large  as  the  gold  reserves  under 
the  old  national  banking  system  on  June  30,  1914— $1,786,000,000,  compared  to 
$592,000,000.  During  the  same  period  credit  instruments  (demand  deposits  and 
notes)  increased  about  twofold— from  $(5,100,000,000  to  $11,700,000,000.  This  increase 
of  credit  instruments  is  typical  of  the  banking  situation  for  the  country  as  a  whole 
and  largely  explains  the  present  high  level  of  prices.     The  increase  of  gold  has  been 


ECONOMICS   OF   THE    CONSTRUCTION   INDUSTRY.  21 

80  great,  however,  that  the  base  has  grown  faster  than  the  superstructure' — whieh  ia 
contrary  to  the  normal  tendency.  The  ratio  of  gold  to  credit  has  risen  from  9.G  per 
cent  to  15.3  per  cent.  The  legal  reserve  requirements  of  the  present  system  are  such 
that  for  1918  there  is  an  excess  of  gold  above  these  requirements  of  more  than 
$700,000,000.  The  reserve  required  by  law  to  support  the  $11,700,000,000  of  credit 
instruments  of  1918  is  $1,070,000,000.  The  .$700,000,000  of  free  gold  could  support 
an  additional  superstructure  70  per  cent  as  large  as  the  existing  one,  which  indicates 
that  for  the  banking  of  the  country  as  a  whole  a  potential  future  expansion  of  50  per 
cent  is  a  conservative  estimate. 

False  views  of  inflation. — Many  people,  referring  to  this  inflation  in  the  circu- 
lating medium,  and  assuming  that  it  is  temporary,  are  waiting  for  this  inflation  to 
subside.  When  we  speak  of  inflation  we  mean  more  circtdating  medium  than  ia 
needed  to  transact  the  biisiness  of  the  country  on  a  given  price  level.  But  what 
price  level?  Some  people  mean  the  price  level  of  1913-14.  Om*  ctirrency  is  cer- 
tainly inflated  in  terms  of  the  prices  of  that  period,  just  as  the  currency  in  1914  was 
inflated  with  respect  to  the  prices  of  1896,  but  our  ctirrency  is  not  inflated  at  the  present 
time  relative  to  the  new  level  of  prices  in  the  world  which  the  v/ar  has  brought. 
The  countrj-'s  volume  of  money  will  have  to  be  judged  in  terms  of  this  new  price 
level,  not  in  terms  of  a  price  level  that  is  past.  To  speak  of  the  present  "inflation" 
as  temporary  is  to  assume  the  very  thing  about  v.-hich  we  are  contending — to  assume 
that  the  normal  prices  are  those  of  1914. 

Basis  of  expectation  as  to  future  movement  of  prices. — Let  us  examine  the 
factors  tipon  which  any  futiire  price  movements  must  depend. 

1.  Gold  will  not  return  to  circulation. — No  great  effect  in  the  direction  of  falling 
prices  can  be  expected  from  any  return  of  gold  and  other  lawful  money  into  daily 
iirculation.  Such  a  reversion  would  be  contrary  to  monetary  experience  every- 
where. When  people  have  learned  to  leave  their  gold  and  silver  in  the  banks  and  use 
paper  money  and  checks  instead  they  find  the  additional  convenience  bo  great  that 
they  ^\ill  never  fully  return  to  the  old  practice. 

2.  No  great  outflow  of  gold  through  international  trade. — It  should  he  noted  that  many 
of  the  former  reasons  foj*  a  flow  of  gold  from  America  abroad  have  disappeared.  We 
used  to  ow'e  Europe  a  huge  balance  of  interest  payments  upon  American  securities 
nhe  held.  The  situation  is  reversed  to-day.  Moreover,  Europe  must  pay  us  money 
for  the  materials  we  will  send  her  for  reconstruction,  or  at  least  pay  us  interest  on 
credit  we  will  extend  her.  Thus  our  exports  will  probably  exceed  our  imports  during 
the  reconstruction  period.  We  used  to  pay  ocean  freight  money  to  foreign  carriers; 
to-day  the  American  merchant  marine  will  keep  in  American  hands  tens  of  millions 
of  dollars  of  ocean  freight  money.  The  huge  volume  of  American  tourist  travel 
abroad,  for  whose  expense  we  had  to  settle,  has  stopped  and  can  not  resume  for  a  year 
at  least.  For  all  these  reasons  the  lines  are  laid  for  a  movement  of  gold  from  Europe 
here  rather  than  a  movement  of  gold  from  America  to  Europe. 

"Yes,  but,"  people  say,  "wait  until  trade  is  resumed  between  the  United  States 
and  Europe,  then  surely  'low-priced  Ivaropean  goods'  ^^'ill  flow  over  here  in  such  enor- 
mous volume  that  they  will  liquidate  all  annxial  obligations  to  us  in  goods."  Ulti- 
mately Europe  must  pay  her  obligations  to  us  in  goods,  but  it  Avill  take  many  years. 
Meanwhile  she  needs  our  tools,  machinery,  and  raw  materials  for  immediate 
reconstruction. 

The  fact:  European  prices  have  risen  more  than  ours. — At  the  present  time 
Eiu^opean  goods  are  not  "low  priced''  (however  little  the  money  wages  of  European 
labor  Avill  btiy).  Prices  in  Europe  since  the  war  began  have  risen  more  than  they 
have  in  the  United  States.  The  price  rise  has  been  less  the  farther  from  the  seat  of 
h(>.sti]^ties.  It  was  least  in  Aiustralia  and  New  Zealand.  It  was  next  least  in  the 
United  States,  Canada,  and  Japan.  Then  came  neutral  Europe;  then  our  present 
allies,  and  finally  Germany  and  Russia.     Gold  tends  usually  to  flow  from  high-priced 


22  KCOXO.MICS    OF   THK   COXSTRUCTION"   INDUSTRY. 

(■<innlrie.s  to  l«»w-prico(l  countries,  so  that,  until  "Innatefl"  Eiiropcjan  prices  fall  f(old 
is  not  likoly  to  (l(»w  thitlicr.  TricnM  are  no  more  likely  to  fall  there  than  here,  and  for 
tlio  Harno  reiusons,  which  will  be  exi)lained  l)elow. 

:'..  Jicduf.lioa  of  oiiLHtandin.g  credit. — The  chief  (lependen<;e  of  those  who  predict 
J<  >\vcr  prices  is  on  a  reduction  of  the  Huperstrurture  of  credit  resting  upon  our  gold  rather 
lli;iii  on  any  reduction  iji  the  volume  of  this  gold  itself.  They  look  for  a  contraction 
of  hiuik  credit,  a  reduction  iu  the  Aolume  of  deposits  sul)jcct  to  check,  which  circidate 
lliniiiu'liniil  till-  country. 

KITcrt  of  (iovornmont  loans  on  credits  and  prices. — But  the  main  cause  for 
tlic  present  extensi(m  of  bank  credit  is  the  liberty  loan,  and  there  is  soon  t/)  be  another. 
Subscribers  for  the  new  loan  will  not  pay  for  their  l)onds  in  full  any  more  than  they  did 
in  the  })revioiis  casea  but  rather  le.ss.  Many  of  them  will  deposit  the  bonds  with  the 
banks  as  security  for  loans  to  be  repaid  later.  The  effect  on  our  circidating  medium 
will  be  the  same  a!s  if  the  Government  were  to  impose  a  levy  of  $6,000,000,000  of  credita 
u])on  the  Federal  re.serve  banks,  and  then  order  them  to  apportion  these  credits  out 
among  the  banks  of  the  countiy.  This  jirocess  will  certainly  lead  to  an  expansion 
of  credits.  The  former  issTies  of  liberty  bonds  are  still  carried  by  the  banks  to  a 
considerable  extent.  It  may  be  contended  that  the  l)ank  <Tedit  expansion  repre- 
.sented  by  the  new  victory  notes  has  already  occurred  in  the  form  of  Treasury  certifi- 
cates, which  are  merely  to  be  funded  In*  the  victory  notes.  The  victory  note  issued 
tlius  represents  only  a  shifting  of  the  obligation  to  pay  credits  advanced  to  the  Govern- 
ment, a  shifting  from  the  shoidders  of  the  banks  to  the  shoulders  of  the  ^ictory  note 
Iniyers.  The  volume  of  outstanding  bank  credit  remains  the  same.  To  a  certain 
degree  this  contention  is  triie.  But  a  portion  of  the  April  Aictoiy  note  iasue  will  go 
to  pay  fntiu'e  expenditures,  not  accriied  expenditures.  Then  as  soon  aa  the  Govern- 
ment needs  additional  money,  it  will  issue  new  Treasury  certificates,  resulting  in 
new  extension  of  bank  credit.  Moreover,  there  is  little  doubt  that  there  "will  be  at 
least  one  more  Government  bond  is.sue  during  the  reconstruction  j'eriod,  and  this 
v,-i\\  tend  to  further  increase  our  present  credit  structiu'e. 

Foreign  government  borrowings,  same  effect. — The  banks  must  lend  credit  and 
create  deposits  to  meet  the  expenditiu'es  not  only  of  oxir  own  Government,  biit  of 
foreign  Governments  as  well.  The  same  thing  residts  even  if  these  Governments 
are  served  directly  by  private  investors  here  instead  of  \-ia  the  United  States  Treasurj-. 
These  investors  pay  for  foreign  Government  bonds  as  they  do  for  our  liberty  bonds — 
on  the  installment  plan — paying  a  small  part  down  and  borrowing  the  rest  from  the 
bank.  Tliis  increased  purchasing  power  will  be  mostly  spent  in  this  country  for 
supplies  to  l>e  sent  abroad  for  rehabilitation.  This  continuance  of  vast  loan  issues, 
connected  ^vith  war  and  reconstruction  throughout  the  world  is  a  factor  which  will 
maintain  the  high  i>rice  le\el  tem^iorarily,  which  means  many  months. 

It  is  also  worth  keeinng  in  mind  that  liberty  bonds  and  other  Government  securitie.s 
held  here  do  not  wholly  cease  being  a  source  of  credit  expansion  when  the  indi\idual 
subscribers  have  completed  their  payments  on  the  bonds  and  really  own  them.  These 
new  bonds  are  \inrivaled  security  for  fiwther  borrowings  from  banks  for  commercial 
purposes,  and  they  ^^■ill  continue  to  l)c  so  until  the  Government  which  issues  them 
redeems  them. 

The  availability  of  the  vast  Issues  of  war  bonds  as  l>ases  for  fiitiire  credit  expansion. 
coui>led  with  the  fart  that  our  banking  system  has  still  many  unused  reefs,  sure  to 
be  taken  out  later,  when  business  wishes  to  spread  more  sail,  is  the  chief  reason  why 
l>rices  will  keep  up  permanently;  that  is,  for  many  years. 

Between  the  period  of  temporary  and  the  ])eriod  of  permanent  effects,  there  may  be 
a  slight  dip  in  the  price  level,  say  a  year  from  now.  If  so,  it  is  the  more  incumbent 
upon  biisiness  to  proceed  now;  for  it  can  not  wait  a  year.  ''' 


ECOXOMKS    OF   THi:    CONSTRUCTION    INDUSTRY.  23 

Commercial  loans  must  increase.— Duriag  the  war  the  flotation  of  stocks  and 
bonds  of  commeixial  concerns  has  been  very  greatly  diminished.  During  the  period 
upon  which  we  are  now  entering,  the  issue  of  snch  securities  will  increase  greatly. 

Opposition  of  business  men  to  credit  contraction. — Against  any  con.siderable 
reduction  in  bank  credit  and  hence  in  the  general  level  of  prices,  we  shall  find  the 
whole  business  community  in  arms.  Falling  prices  mean  hard  times  for  the  indiWdual 
and  for  the  Nation  and  everyone  resists  the  tendency.  At  the  end  of  the  Civil  War 
the  Treasiuy  started  to  reduce  the  quantity  of  greenbacks.  A  start  had  hardlj-  been 
made,  however,  before  the  business  depression  of  1866  and  1867  caused  Congress  to 
forbid  by  law  any  further  reduction.  Shoidd  the  Federal  reserve  banks  attempt, 
by  raising  their  discount  rate  or  otherwise,  to  rediice  the  volume  of  l^ank  credit  out- 
standing, they  \^'ill  meet  tvith  the  same  sort  of  opposition.  Moreover,  the  hostile 
attitude  of  labor  toward  the  lowering  of  wages  will  deter  legislators  and  bankers  from 
any  organized  policy  of  contraction. 

Increase  in  deposit  banking  on  the  continent. — Looking  into  the  still  more 
remote  futm-e,  there  wall  be  in  Europe,  particularly  on  the  Continent,  a  vast  increase 
in  deposit  banking.  The  need  of  the  Governments  there  for  fimds  during  war  times 
hastened  the  introduction  of  deposit  Ijanking.  Money  Vf  ent  out  of  circtdation  into  bank 
vaults ,  and  there  became  the  basis  for  circidating  credits.  This  means  a  new  hal)it  wMch 
will  lead  to  a  gi-eat  currency  expansion.  Far-away  countries,  like  India  and  China, 
are  also  leai'ning  to  use  deposit  banking.  It  is  as  if  a  new  soTirce  of  gold  sujjply  had 
been  discovered.  WTiat  ha^  been  discovered  is  a  new  way  of  using  the  gold  stipply. 
The  world,  during  the  coiu'se  of  the  war,  has  thus  started,  or  has  hastened,  an  equiva- 
lent of  the  price  revolution  of  the  sixteenth  century. 

Go  ahead  on  the  new  price  level. — Business  men  should  face  the  facts.  Tu  talk 
reverently  of  1913-14  prices  is  to  si)eak  a  dead  language  to-day.  The  buyers  of  the 
country,  since  the  armistice,  have  made  an  unexampled  attack  upon  i)rices  through 
their  waiting  attitude,  and  yet  price  rece-ssions  have  been  insignificant.  The  reason 
is  that  we  are  on  a  new  high-price  level,  wliich  will  l»e  found  a  stid^born  reality. 
Business  men  are  going  to  find  out  that  the  cdever  man  is  not  the  man  who  waits,  but 
the  one  who  finds  out  the  new  price  facts  and  acts  accordingly. 

THE  NEW  COMMODITY  PRICE  LEVEL. 

Why  prices  were  expected  to  fall  with  the  end  of  the  war. 

During  the  war  most  people  believed  that  with  the  coming  of  peace 
there  would  come  a  great  fall  in  prices.  They  saw  prices  rising  to 
abnormal  heights  because  of  the  war  and  expected  that  in  the  post- 
war period  prices  would  find  their  prewar  level,  the  cause  of  high 
prices — war — no  longer  existing.  A  more  particular  statement  of 
this  pomt  of  view  was  that  war  orders  for  commodities  and  the 
scarcity  of  these  commodities  relatively  to  the  demand  brought  the 
high  prices.  Naturally  with  the  end  of  the  war,  the  abnormal 
demand  for  commodities  would  disappear  and  prices  would  conse- 
quently descend  to  their  old  level.  But  in  many  quartei-s  it  was 
feared  that  the  transition  from  war  to  peace  w^ould  involve  not  only 
a  return  to  prices  as  low  as  before  the  war,  but  an  industrial  crisis 
resulting  in  an  utter  collapse  of  values.  Although  no  attempt  will  be 
made  to  give  a  complete  catalogue  of  the  reasons  advanced  for 
expecting  such  a  disaster  to  ijidustry,  some  of  the  more  common 
argimients  will  here  be  noted.     It  was  pointed   out  that  industrial 


24  KCONOMICK   OF   TTTK   CONSTRUCTION    INDUSTRY. 

|)Iiiiils  in  tlio  United  States,  stiimiliitod  l)y  war  orders,  developed  an 
]il)rionniil  cupacify  of  ])ro(bietion.  With  tlio  coming  of  peace  the 
inujiu'^ei'S  of  these  phuits,  in  order  to  retaiji  tlie  economics  of  full 
capacity  production  would  slash  ])rices  to  obtain  business.  It  was 
fiirMiormon^  poijited  out  that  indnstry  in  European  countries  had 
also  been  stimulnted  and  had  achieved  an  abnormal  caf)acity  for 
])roduction.  It  might  be  expected  therefore  that  price  cutting  would 
lake  j)lace  in  those  countries  among  tlieir  own  manufacturers  just  as 
in  this  country,  and  a  surplus  of  goods  being  ])roduced  iji  all  the  leading 
industrial  countries,  competition  in  prices  would  become  international 
wheji  the  manufacturer  of  each  coimtry  tried  to  dispose  of  their 
suri)lus  abroad.  To  add  to  the  danger  of  cutthroat  competition 
both  on  a  jiatiojial  and  on  an  international  scale  was  the  fact  that 
the  demobilizatioji  of  vast  armies  might  be  expected  to  create  armies 
of  imemployed  in  all  ijulustrial  comitries  on  a  scale  never  before 
equaled.  These  imemployed  workmen  it  might  be  expected  would 
be  willing  to  work  for  any  wage  the  manufacturei-s,  driven  to  des- 
peration by  cuttliroat  competition,  would  see  fit  to  offer.  Finally,  to 
make  the  pessimistic  view  complete,  the  attitude  of  buyers  iji  falling 
markets  was  cmpliasized.  All  buyers  whether  consumers,  retailers, 
job])ci's.  wholesalei'S,  or  producers  have  a  tendency  to  pursue  a  hand- 
to-mouth  policy  in  buyijig  during  periods  of  falling  prices,  putting  off 
each  ]nirchase  as  long  as  possible  in  the  expectation  of  being  able  to 
buy  more  cheai)ly  later  on.  Thus  the  abnormally  large  output  of 
the  manufacturers  would  be  tlirown  on  a  market  which  w^ould  be 
abnormally  small  because  of  the  watchful  waiting  policy  of  buyers. 

The  present  situation. 

Such  having  been  the  psychological  attitude  of  most  people  in  the 
United  States,  it  is  remarkable  that  with  the  armistice  seven  months 
old  we  find  business  no  woi-se  off  than  it  is.  Tlie  dire  turn  of  events 
prophesied  has  not  come  to  pass.  It  is  true  that  war  ordei-s  have 
largely  come  to  an  end,  and  this  has  reduced  the  market  for  the  prod- 
ucts of  many  industries.  It  is  true  also  that  the  policy  of  watcliful 
waiting  for  a  fall  in  prices  has  been  steadily  pursued  by  millions 
of  buyei-s  and  that  as  a  consequence  busijiess  is  halting.  The  iSTational 
Association  of  Majuifacturors  issTuxl  a  report  (April  14,  1919),  based 
ui)on  a  canvass  of  4,000  representative  establishments  in  practically 
every  line  of  iiulustry  in  the  United  States.  Of  22  groups  of  industries 
comprised  in  the  study,  5  reported  busijicss  good,  1  reported  business 
fair  to  good,  and  16  reported  business  conditions  below  50  per  cent 
of  normal.  But  in  spite  of  all  this,  commodity  prices  have  fallen 
but  little  during  the  seven  months  since  the  armistice  was  signed. 
Wholesale  food  prices  as  reported  by  the  .Vnnalist  have  risen  consid- 
erably since  February  1,1919,  and  the  average  price  of  25  leading  indus- 


ECONOMICS   OF    THE    CONSTRUCTION    INDUSTRY.  25 

trial  stocks  as  reported  in  the  Ajmalist  had  reached  in  the  first  half 
of  May  a  higher  level  than  at  any  time  since  July,  1917.  The  price 
slashiiig  and  cutthroat  competition,  national  and  international,  has 
not  materialized.  Let  lis  examme  in  a  broad  way  the  causes  of  the 
present  condition  and  the  prospects  for  the  future. 

The  role  of  inflation. 

The  rise  in  prices  during  the  war  was  not  brought  about  simply  by 
war  orders  for  commodities  and  a  scarcity  of  goods  relatively  to  the 
abnormal  demand.  The  various  Governments  of  the  world  found  it 
expedient  in  order  to  obtain  the  commodities  required  for  v/aging  war 
on  a  large  scale  to  inflate  the  currency  either  directty  by  the  issue  of 
paper  money  or  indirect!}^  by  the  issue  of  bonds  which  were  used  as  a 
basis  of  credit.  Now,  although  the  war  orders  have  largely  come  to  an 
end,  and  the  scarcity  of  commodities  relatively  to  demand  has  some- 
what diminished,  the  inflation  of  the  currejicy  is  still  with  us,  and  not 
a  thing  of  the  past.  This  matter  is  fully  discussed  in  the  section  of  this 
report  called  ''The  New  Price  Revolution,'  written  by  Prof.  Irving 
Fisher.  Prof.  Fisher,  after  a  careful  survey  of  the  whole  problem  of 
present  and  probable  future  expansion  of  money  and  credit,  con- 
cluded that  we  are  on  a  permanently  higher  price  level  and  can  not 
because  of  this  expansion  expect  any  substantial  decline  in  prices. 

The  watchful  waiting  policy  of  the  buyer. 

The  watchful  waiting  b}*  buyers  for  lower  prices  which  is  char- 
acteristic in  times  of  falling  prices  has  not  had  the  usual  disastrous 
efi^ect  because  the  period  of  rismg  prices  during  the  war  differed  in 
a  vital  respect  from  the  usual  period  of  rising  prices.  Ordinarily 
during  a  period  of  rising  prices  extending  over  a  number  of  years 
production  of  commodities  keeps  nearly  abreast  of  demand  and 
finally  outstrips  consumption,  an  accumulated  sm'plus  being  the 
result.  Buyers,  generaU}-,  noting  the  constantly  rising  prices,  lay 
in  abnormal  supplies.  Consumers  buy  in  advance  of  their  real 
needs,  arguing,  for  example,  that  although  they  do  not  need  a  new 
pair  of  shoes  or  a  new  suit  just  at  present,  it  is  a  wise  plan  to  buy 
because  later  the  shoes  will  cost  a  dollar  more  or  the  suit  $5  more. 
Likewise  the  retailer,  the  jobber,  and  the  wholesaler  note  the  advan- 
tage to  be  gained  over  their  competitors  by  bu}  ing  early,  ])efore  the 
next  advance  in  prices.  Manufacturers,  also,  buy  raw  materials  freely 
and  manufacture  stocks  in  advance  of  sales  in  the  expectation  of 
profiting  by  lower  costs  than  are  likely  to  prevail  later  on.  Hence  it 
happens  that  when  the  ordinary  wave  of  high  prices  has  reached  its 
cr^st  consumers  are  well  supplied  with  goods  of  all  kinds,  retailers' 
shelvfes  are  laden,  and  warehouses  of  jol)bers,  wholesalers,  and  manu- 
factm-ers  are  filled  to  tlie  roof.    Then  when  the  turn  comes  and  ])rices 


20  i:(()N'().M I cs  oi'  'I'iiK  cox.sTKTrTrDX  rxnrsTFiY. 

bojjjiii  to  fall,  buyers  uic  not  only  inclined  to  defer  puicluises,  but  are 
so  well  stocked  up  tlint  if  it  seems  wise  they  may  |)ractically  stop 
l)uying  altogether. 

Jiut  during  the  war,  although  prices  were  rising  and  it  may  have 
seemed  wise  to  buyers  to  lay  in  supplies  for  future  use,  they  flid  not 
do  KG.  Consumers  responding  to  the  call  of  patriotism  refrained 
not  onlv  from  buying  in  advance  of  need  ))ut  even  from  buying  their 
customary  supplies.  Some  refrained  from  buying  ])ecause  they  had 
spent  their  money  for  bonds  or  war  saving  stamps;  others  because 
tliey  voluntarily  refused  to  compete  with  the  Government  for  sup- 
plies. Retailers,  jobbers,  and  wholesalers  either  could  not  get  large 
supplies  or  refrained  from  buying,  for  patriotic  reasons.  In  the  case 
of  manufacturers  those  who  manufactured  nonessentials  had  their 
business  regulated  ])y  Government  orders  and  could  not  manufac- 
ture on  a  normal  scale,  let  alone  pile  u])  a  surplus.  Those  who 
manufactured  for  the  Government  had  all  they  could  do  to  turn 
out  the  goods  demanded  for  immediate  consumption.  Hence  there 
was  not  when  the  war  ended  a  sm^plus  of  goods  in  the  hands  of  any 
class — ^consumers,  retailers,  jobbers,  wholesalers,  or  manufacturers. 
The  watchful  waiting  for  lower  prices  manifested  itself,  but  it  had 
the  minimum  capacity  for  mischief.  When  a  man's  best  suit  begins 
to  go  to  pieces,  pride  and  decency  compel  him  to  buy  another, 
whatever  he  may  think  of  the  general  level  of  prices  in  the  future. 
When  the  retailer  begins  to  lose  sales  because  he  has  no  goods  on 
hand,  he  buys  regardless  of  the  possibility  of  a  cheaper  purchase, 
later  on;  and  so  do  the  jobber  and  w^holesaler.  The  manufacturer: 
also  will  keep  his  factory  going  regardless  of  the  prediction  of  lower 
costs  in  the  future  if  by  closing  down  he  loses  present  business. 

Production  during  the  war. 

That  the  available  stocks  of  commodities  of  all  kmds  are  depleted 
is  pretty  generally  acknowledged.  This  fact  is  emphasized  in  the 
report  of  the  National  Association  of  Manufacturers  already  referred 
to.  In  fact  it  could  hardly  be  expected  that  any  considerable  stocks 
should  exist  at  the  end  of  the  world  war,  with  its  giant  capacity 
for  consumption.  That  stocks  of  commodities  in  general  are  largely 
exhausted  is  hardly  capable  of  statistical  demonstration.  But  in 
so  far  as  statistics  of  production  are  available  for  leading  com- 
modities, they  tend  to  show  that  it  is  useless  to  look  for  hoarded 
stores  of  commodities,  cither  raw  materials  or  finished  articles. 
In  the  accompanying  table  (Table  I),  ''Production  of  leading  min- 
erals in  the  United  States  and  the  world,"  some  light  is  thrown 
both  on  the  probability  of  stocks  of  goods  on  hand  and  on  the 
question  of  expansion  of  industry  during  the  w^ar. 


ECONOMICS   OF   THE   CONSTRUCTIOlSr   INDUSTRY. 


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ECONOMICS    OF    THE    CONSTRUCTION    INDUSTRY.  29 

World  production  of  coal  in  1913  was  greater  than  in  any  year 
since  that  time.  Not  only  was  there  not  an  abnormal  expansion  of 
the  coal  industry  from  1913  to  1918  but  not  even  a  normal  increase. 
Here,  then,  in  the  development  of  this  fundamental  industry  durmg 
the  war  there  is  no  indication  of  an  expansion  of  industry  as  a  whole. 
In  the  United  States  coal  production  in  1918  exceeded  that  of  1913 
by  about  20  per  cent,  but  this  was  a  smaller  relative  increase  than 
from  1908  to  1913.  In  1914,  1915,  and  1917  the  production  of  coal 
in  tlie  United  States  was  less  than  m  1913. 

Petroleum  production  showed  a  large  increase  from  1913  to  1917, 
both  m  the  United  States  and  in  tlie  world  as  a  whole.  Figures  for 
1918  are  not  given  in  the  table,  but  there  was  doubtless  a  further 
increase  in  1918.  Tlie  increase  from  383,753,547  barrels  in  1913  to 
500,229,929  barrels  m  1917,  was  relatively  but  little  larger  than  the 
increase  in  the  four  years  from  1909  to  1913.  For  the  United  States 
alone  also  the  increase  during  the  four  years  1913  to  1917  was  rela- 
tively about  tlie  same  as  from  1909  to  1913.  Production  of  petroleum 
therefore  does  not  indicate  an  abnormal  expansion  of  industry  as  a 
v\"hole. 

Iron  ore  production  statistics  for  the  world  are  not  available.  But 
in  the  United  States,  which  produced  more  than  one-third  of  the 
world's  iron  ore  in  1913,  production  increased  only  from  61,780,437 
tons  m  1913  to  75,288,851  tons  m  1917,  an  mcrease  of  less  than  25 
per  cent.     This  also  could  hardly  be  called  an  abnormal  expansion. 

Production  of  coj)per  both  in  the  world  as  a  whole  and  in  the  United 
States  increased  more  rapidly.  From  a  production  of  2,198,733,223 
pounds  in  1913  the  world's  output  increased  to  3,020,654,736  pounds 
in  1918,  an  mcrease  of  37  per  cent.  During  the  same  period  pro- 
duction of  copper  in  the  United  States  mcreased  about  50  per  cent. 
During  the  live  years  from  1908  to  1913  production  of  copper  both  in 
the  world  as  a  whole  and  in  the  United  States  alone  increased  approxi- 
mately 30  per  cent.  When  the  abnormal  consumption  of  copper  in 
the  manufacture  of  munitions  is  considered  in  the  light  of  tliis  uicrease 
in  production,  it  becomes  evident  that  no  considerable  surplus  of 
articles  contauiing  copper  cotdd  have  existed  when  the  armistice  was 
signed.  Since  then  tlie  copper  companies  haA'c  accumulated  a  con- 
siderable siu'plus  of  copper.  Whatever  surplus  the  copper  companies 
liave  accumulated  since  the  cessation  of  war  orders  will  probably  fall 
far  short  of  covering  the  present  shortage  of  copper  iji  the  coinitries 
which  during  the  war  have  been  cut  off  from  normal  supplies. 

Lead  production  statistics  for  the  world  aie  not  available.  Pro- 
duction in  the  United  States  increased  about  33  per  cent  during  the 
four  years  from  1913  to  1917.  Production  of  spelter  almost  doubled 
in  the  United  States  from  1913  to  1918.  This  no  doubt  represents  an 
increase  considerably  above  the  increase  that  would  have  occurred 


30  KcoNOMrrs  or  Trrr,  constructfox  industry. 

if  (licrc  ]iu(l  Ix'cii  IK)  w'.'U',  iuid  it  is  douljirnl  wlicthcr  the  markets  will 
uhsojl)  tlie  cupucit y  production  of  our  \on(\  and  ziiic  industries  in  the 
iiciiv  future. 

'I'lic  foic^oiiiL!;  statistics  taken  us  a  whole  indicate  two  tliinj^s:  (1) 
That  lU)  suj|)his  of  tliosc  minerals  was  accumulated  during  the  war; 
(2 )  that  thert^has  })een  no  such  large  increase  in  the  productive  capac- 
ity of  industry  as  a  whole  as  is  apparently  widely  assumed.  It  is 
only  certain  ijidustries  concerned  primarily  with  war  production  that 
liave  e.\j)anded  far  above  nonnal.  The  end  of  the  war  did  not  so 
niuch  necessitate  cutting  down  of  production  as  a  whole  as  a  read- 
justment of  production  from  a  war  to  a  peace  basis.  Tliis  read- 
justment is  no  doubt  a  costly  process,  but  the  cost  has  been  largely 
liquidated  by  the  large  corporations  in  the  way  of  abnormal  deduc- 
tions from  profits  under  the  head  of  amortization  or  depreciation. 

In  agricidture  theie  has  been  not  only  no  a})normal  increase  in 
production,  but  on  the  contrary  an  absolute  decrease.  As  sho\vii  in 
the  accomptmying  table  on  "World  production  of  agricultural  com- 
modities '  (Table  2)  the  production  of  wheat,  corn,  rye,  oats,  sugar, 
and  cotton  during  the  war  fell  below  the  prewar  average.  In  the  case 
of  rice  only  was  there  an  hicrease.  No  surplus  of  foodstuffs  nor  of 
cotton  is  available  in  the  world,  and  productive  capacity  of  the  year 
1919  is  hardly  great  enough  to  meet  the  needs  of  the  w^orld.  A 
collapse  of  prices  resulting  from  an  unmarketable  surplus  of  agri- 
cultural products  is  an  event  that  need  not  be  feared. 

What  the  business  man  stili  fears. 

Although  no  sharp  fall  in  prices  has  occurred,  or  perhaps  because 
no  sharp  fall  has  occurred,  the  business  man  still  fears  to  go  full 
speed  ahead.  To  point  out  to  him  that  inflation  still  exists  and 
will  tend  to  maintain  high  prices,  that  stocks  of  commodities  are 
exhausted  and  must  be  replaced,  and  that  the  present  productive 
capacity  of  the  world  mdustry  is  probably  not  large  enough  to  glut 
the  market,  does  not  remove  his  imeasiness.  Two  thoughts  in  the 
minds  of  busmess  men  are  exercising  a  repressive  influence  upon 
hulustry.  The  first  is  that  prices  inevitably  are  going  to  move  down- 
ward tow^ard  the  prewar  level,  and  that  this  movement  will  be  sub- 
stantial enough  to  give  the  producer  or  dealer  who  defers  operations 
for  some  time  an  important  advantage  over  his  competitor  who  goes 
ahead  at  present.  This  is  the  immetliate  cause  of  the  halting  condi- 
tion of  business  at  present.  Lurkhig  in  the  background  is  the  second 
thought  of  the  business  man,  namely,  that  the  productive  capacity  of 
world  industry  is  going  to  expand  more  rapidly  than  the  world  marl>et 
for  its  products,  and  that  there  is  danger  of  a  universal  collapse  in^^he 
industry  of  the  world. 


ECONOMICS   OF   THE   COXSTRUCTIOX    INDUSTRY.  31 

Costs  of  production. 

Now,  what  are  the  facts  as  to  the  prospect  of  a  substantial  recession 
of  prices  from  month  to  month;  a  recession  sufficient  to  cause  a 
greater  loss  to  the  business  man  who  goes  full  speed  ahead  than  to  the 
one  who  waits?  Prices  of  commodities,  mcluding  agricultural  prod- 
ucts, cover  the  costs  of  doing  business  and  profits,  and  may  be  ana- 
lyzed into  the  following  constituents:  (1)  Interest  on  borrowed 
money,  (2)  materials  used,  (3)  taxes,  (4)  a  fair  return  on  the  capital 
and  labor  of  the  owner,  (5)  excess  profits,  (6)  wages. 

Prices  can  not  fall  unless  costs  decrease  or  business  men,  including 
farmers,  are  willing  or  compelled  to  forego  their  profits.  What  are 
the  prospects  of  a  decline  of  costs  or  profits? 

The  interest  rate  advanced  durmg  the  war  and  has  played  a  part, 
therefore,  in  higher  cost  of  production,  though  only  a  minor  part. 
There  is  little  prospect  for  a  substantial  reduction  in  the  rate  of 
interest,  and  still  liess  prospect  of  any  appreciable  reduction  in  the 
total  cost  of  production  from  this  source. 

The  finished  product  of  one  industry  may  become  the  raw  material 
of  another.  Hence  analysis  at  this  pomt  is  difficult.  It  may  be 
maintained,  however,  that  the  cost  of  raw  materials  of  any  particular 
industry,  including  agriculture,  will  not  decline  until  the  costs  of 
production  or  profits  of  other  industries  have  declined.  Hence,  gen- 
erally speaking,  any  decline  in  the  costs  of  raw  materials  must  be  the 
result  of  a  decline  in  interest,  wages,  profits,  or  taxes. 

Taxes  may  be  subdivided  for  our  purpose  into  excess  profits  and 
income  taxes  and  other  taxes.  Obvioush',  if  the  excess  profits  or 
income  of  any  industry  decline,  the  excess-profits  taxes  and  income 
taxes  on  such  industry  will  also  decline.  Aside  from  that,  no  sul)- 
stantial  decrease  in  taxation  is  to  be  expected  in  the  near  future. 
Even  if  Federal  taxes  grow  less  it  is  altogether  likely  that  State  and 
local  taxation  will  grow  heavier. 

It  is  not  to  be  expected  that  business  men,  including  farmers,  will 
in  the  future  lightly  forego  a  fair  return  on  their  capital  or  their  own 
labor.  The  only  thing  which  would  tend  to  compel  them  to  do  so  is 
production  far  in  excess  of  demand,  which  would  compel  producers 
to  sacrifice  their  products  for  what  they  could  get.  This  point  will 
be  discussed  further  under  the  head  of  future  demand  for  goods. 

Excess  profits,  particularly  where  excess  profits  are  due  mainly  to 
increased  prices  rather  than  to  increased  volume  of  production,  will 
no  doubt  diminish  and  some  decrease  of  prices  may  be  expected  from 
this  source.  Some  industries  during  the  war  sold  their  products  at 
exceedingly  high  prices  and  realized  abnormally  large  profits  for  that 
rcasbn.  It  is  probable  that  world  shortage  of  many  commodities  will 
still  enable  some  of  these  industries  to  realize  abnormal  profits  in  the 
after-war  period.     But  they  can  not  all  hope  to  continue  selling  their 


32  KCONOMICS   OF   THE   CONSTRUCTION    INDUSTRY. 

products  at  (op  AViir  ])ric<*s.  Conipolit  ion  or  Ciov<>n)iii<'nt  iiit^ti'ference 
would  bring  down  thoir  profits,  oven  if  no  voluntary  reduction  wore 
made.  It,  should  Ix^  ad(l(Hl  hero  that  a  largo  part  of  what  in  some 
(|uartors  is  consid(u-ed  cx(;ess  profits  of  the  farmc^r  is  only  a  fair  return 
on  his  capital  and  labor,  very  inadequately  compensated  before  the 
war. 

Wages  are  unlikely  to  bo  generally  reduced  during  the  forthcoming 
months.  Some  reductions  have  occurred  since  the  armistice,  the 
most  important  of  which  have  been  reductions  of  overtime  and 
bonuses,  and  little  further  decrease  can  be  expected  from  this  source. 
On  the  other  hand,  there  have  also  been  some  increases  in  wages, 
notably  in  the  building  trades  and  in  the  case  of  railway  employees. 
On  the  whole  the  attitude  of  employers  in  the  Ignited  States  seems  to 
be  not  to  reduce  wages  until  the  cost  of  living  is  reduced.  When  this 
attitude  of  employers  is  taken  into  consideration  along  with  the 
tremendous  opposition  of  wage  earners  to  a  reduction,  little  reason 
can  be  seen  for  expecting  lower  costs  of  production  through  lower 
wages. 

The  foregoing  analysis  although  l^rief  and  impei"fect,  seems  to 
show  pretty  clearly  that  no  substantial  decrease  in  costs  of  production 
is  in  sight  in  the  immediate  future.  Of  course,  if  abundant  stocks  of 
goods  were  on  hand  and  buyers  enjoyed  the  strategic  advantage  over 
sellers  of  being  able  to  hold  off  longer,  then  prices  would  break  some- 
where I'egardless  of  costs  of  production.  But  as  has  already  been 
pointed  out,  buyers  at  the  present  time  do  not  have  this  strategic 
advantage  over  sellers.  In  this  analysis  of  costs  no  account  has  been 
taken  of  the  effect  of  increased  efficiency,  and  increasetl  efficiency  can 
not  be  left  out  of  account  altogether.  Even  if  the  rate  of  interest, 
wages,  cost  of  raw  materials,  and  taxes  were  not  reduced,  cost  of 
production  per  unit  would  be  reduced  by  an  increased  efficiency  in 
production  which  multiplied  the  number  of  units  turned  out  in  a 
given  plant  in  a  given  time.  But  it  is  not  the  reduction  in  prices 
resulting  from  retluction  in  costs  due  to  greater  efficiency  in  the  future 
that  the  business  man  fears  in  the  months  just  ahead.  It  is  the 
reduction  resulting  from  low^er  wages  and  lower  raw  materials  that 
he  fears.  The  possible  reduction  in  costs  due  to  increased  efficiency 
lies  a  little  farther  in  the  future. 

Increased  efficiency. 

It  w^as  pointed  out  above  that  there  is  a  certain  fear  that  a  greatly 
increased  capacity  in  production  owing  to  lessons  in  efficiency  learned 
during  the  war,  will  flood  the  world  with,  commodities  beyond  the 
capacity  of  the  world  market  to  absorb,  and  will  bring  about  a.  uni- 
vei-sal  collapse  of  values.  Although  this  expected  gluttmg  of  the 
world  market  lies  some  distance  in  the  future,  the  fact  that  it  is 


ECONOMICS    OF   THE    CONSTRUCTION   INDUSTRY.  33 

expected  is  already  exercising  a  repressive  influence  on  industry. 
Undoubtedly  there  are  strong  reasons  for  expecting  a  greatly  increased 
volume  of  production,  and  some  of  these  reasons  will  be  enumerated. 

1.  Efficiency  in  industry  through  better  organization  and  new 
inventions  was  stimulated  during  the  war  as  never  before. 

2.  The  war  necessarily  brought  into  use  tests  for  military  fitness 
which  were  applied  with  good  results.  These  included  tests  for 
physical  fitness  for  the  performance  of  a  particular  kind  of  work, 
tests  of  general  mental  ability  by  which  a  man  could  be  placed  in 
the  proper  station,  and  tests  for  technical  training.  It  is  altogether 
likely  that  wider  use  will  be  made  of  such  tests  in  industry  in  the  future 
than  ever  before. 

3.  Industrial  training  is  being  resorted  to  on  a  larger  scale  than 
before  the  war  both  in  school  and  factory,  and  will  increase  industrial 
efiiciency. 

4.  The  wider  development  of  workmen's  compensation  laws  and  a 
more  general  campaign  for  better  health  for  the  workers  will  have  a 
marked  effect  on  efficiency. 

Now  what  will  be  the  effects  of  such  an  increased  efficiency  in  in- 
dustry ?  Will  it  mean  an  extreme  reduction  in  the  cost  of  production 
on  the  one  hand,  and  a  glutting  of  the  world  markets  on  the  other,  so 
that  even  with  his  low  costs  of  production  the  manufacturer  will  be 
compelled  to  sell  at  a  loss  ?  To  enter  into  the  realm  of  prophecy  to 
answer  this  question  is  dangerous.  But  a  few  facts  bearing  on  the 
situation  will  be  presented  which  should  serve  to  free  business  men 
to  some  extent  from  the  fear  that  this  increased  efficiency  m  pro- 
duction, which  should  be  a  blessing  for  the  world,  will  prove  an 
obstacle  to  their  own  prosperity. 

Efficiency  and  wages. 

Whatever  increase  in  efficiency  of  production  is  achieved  either  in 
the  immediate  or  the  more  remote  future  will  appear  to  wage  earners 
as  an  increase  m  the  efficiency  of  labor.  Factory  managers  may 
improve  their  system.  Tests  of  fitness  not  devised  by  himself  may 
make  a  certain  laborer  more  efficient  by  puttmg  him  to  the  task  best 
fitted  to  his  ability.  Marvellous  new  machines  to  increase  produc- 
tion may  be  installed.  But  whatever  the  cause  of  the  increased 
output  may  be,  the  result  will  be  a  greater  output  per  man.  Labor 
will  strongly  contend  that  it  should  benefit  from  this  increased  output 
per  man.  This  is  not  prophecy  but  merely  a  statement  of  what  will 
happen  in  the  natural  course  of  events.  Now  it  appears  from  facts 
at  present  available  in  abundance  that  labor  is  altogether  likely  to 
receive  a  large  share  if  not  most  of  the  benefit  of  this  increased 
production. 

121297°— 19 3 


34  ECONOMICS  or  thk  construction  indlstky. 

Long  boforo  lli«i  world  war  hihor  Icudcus  ohjocted  si  roiigly  to  having 
lal)or  considoivd  simply  a  pjissivo  coniinodity  to  ho  bought  on  the 
open  markot  by  oniployers  at  prices  yiolduig  them  whatever  profit 
the  uncoil trohed  law  of  supply  and  demand  might  permit.  These 
loaders  were  si  riving  and  to  a  certain  degn^e  sucrfu^ling  in  obtaining 
for  the  wage  earners  a  voic4)  m  uiduslrial  management.  The  war 
has  been  won  for  the  allied  countries,  and  labor  in  western  Europe 
and  in  the  I'liilcid  wStales  is  now  striving  more  vigorously  than  ever 
to  obtain  for  itself  some  share  in  the  management  of  industry,  while 
in  Russia  and  apparently  in  central  Europe  it  is  striving  to  obtain 
not  merely  a  share  in  control  but  absoUite  control  of  industry.  The 
wage  earning  class  supplied  most  of  the  man  power  and  sacrificed 
much  in  the  war  and  therefore  feels  justified  in  asking  for  a  comfortable 
living  after  the  war.  Labor's  position  is  strengthened  by  the  favor- 
able attitude  of  the  Government,  at  least  in  the  United  States  and 
in  Great  Britaui.  It  is  further  strengthened  by  the  present  shortage 
in  man  power,  which  is  not  likely  to  be  offset  by  increased  employment 
of  women. 

There  is  much  evidence  that  employers  in  the  United  States  are 
desirous  of  approaching  labor  in  a  spirit  of  conciliation  and  coopera- 
tion. Many  believe  that  labor  should  be  better  paid  than  ever 
beft>re.  Charles  M.  Schwab,  for  example,  one  of  the  largest  employei-s 
of  labor,  recently  expressed  himself  publicly  as  doubting  that  labf>r 
has  in  tlie  past  received  its  due.  The  attitude  of  Jolm  D.  Rocke- 
feller, jr.,  is  well  knowTi.  He  believes  that  wage  earners  have  a  right 
to  a  high  standard  of  living  and  has  for  yeare  been  laboring  to  bring 
about  a  spirit  of  cooperation  with  labor  in  the  plants  in  which  he  is 
interested  by  organizing  the  employees  in  these  plants  and  developing 
johit  committees  representing  capital  and  labor.  His  plan  has  been 
severely  criticized  as  being  too  narrow  and  placing  control  too 
largely  in  the  hands  of  the  employer.  As  stated  in  an  address 
before  the  War  Emergency  Congress  of  the  L^nited  States  Chamber 
of  Commerce  at  Atlantic  City  (December,  1918),  his  plan  does  not 
seem  so  open  to  criticism  as  has  been  affirmed.  To  quote  from  this 
address: 

Tho  most  potoiit  moasuro  to  Ijring  about  industrial  harmonj-  and  prosperit}'  is  ade- 
quate representation  of  labor  in  industiy.  The  most  effectlA'e  structure  of  represen- 
tation is  that  which  is  built  from  the  bottom  up;  which  includes  all  employees;  which 
starts  with  the  election  of  joint  committees  in  each  industrial  plant;  procee<ls  to  the 
foniiation  of  joint  district  councils  and  annual  joint  conferences  in  a  single  industrial 
corjwration;  and  admit.s  of  extension  to  all  corporations  in  the  same  industry  as  well 
as  to  all  industries  in  a  community,  in  a  nation,  and  in  the  various  nations. 

This  form  of  organization  would  probably  be  opposed  by  advocates 
of  trade-unionism  as  destroyhig  trade-union  organization  in  favor  of 
industrial  miionism.     But  it  is  not  the  pm'pose  of  this  report  to  point 


ECONOMICS   OF   THE    CONSTRUCTION    INDUSTRY.  35 

out  what  form  of  organization  is  to  be  desired,  but  merely  to  show 
that  it  is  becoming  apparent  that  empk^yers  feel  the  need  of  cooper- 
ating with  organized  labor  and  are  willmg  to  meet  labor  halfway  in 
some  provision  for  representation  of  labor  in  industry.  There  are, 
still,  of  course,  exceptions,  and  some  employers  would  inhnitely  prefer 
to  come  to  terms  with  labor  by  holdmg  over  labor's  head  the  club  of 
unemployment  rather  than  by  inviting  its  representatives  to  par- 
ticipate in  the  management  of  industry.  But  with,  labor  unions 
strongly  intrenched,  havmg  both  economic  and  political  weapons  at 
hand;  with  liberal  governments  favoring  the  organization  of  labor 
and  its  representation  in  mdustiry;  with  pu])lic  opinion,  as  expressed 
by  such  a  conservative  spokesman  as  William  H.  Taft,  favoring 
unionization  and  collective  bargaining  as  against  the  outworn  system 
of  individual  bargainings;  and  wdth  the  fear  that  bolshevism  is  lurk- 
ing in  the  background  ready  to  advance  if  the  laboring  class  as  a  whole 
is  not  given  an  opportunity  for  not  merely  a  living  but  a  comfort- 
able living  and  a  chance  for  savings,  the  autocratic  emploj^er  of 
labor  can  not  long  survive.  And  with  labor  having  a  stronger  voice 
in  industrial  management  it  is  naturally  to  be  expected  that  with 
increased  efhciency  in  production  labor  will  receive  increased  wages. 
That  is  to  say,  labor  cost,  the  greatest  single  factor  in  cost  of  produc- 
tion, will  not  decline  in  proportion  to  the  increase  in  output  per  man 
per  day,  but  instead  wages  per  day  or  week  will  tend  to  rise.  Con- 
sequently there  will  not  be  the  same  tendency  to  slash  prices  in 
competition  for  business  as  there  would  be  if  mcreased  efficiency  in 
production  were  accompanied  by  an  extreme  decline  in  the  costs  of 
production. 

To  conclude  this  section,  it  may  be  said  that  wage  earners  as  a 
whole  in  the  United  States  have  not  in  the  past  received  wages  suffi- 
cient to  provide  them  w^th  a  comfortable  living  with  a  little  left  over 
for  recreation  and  old  age.  This  has  been  sufficiently  discussed  by 
many  WTiters.  Some  have  accused  big  business  of  paying  labor  less 
than  it  was  able  and  accumulatmg  enormous  profits  for  the  few. 
Defenders  of  the  few  have  replied  that  these  accumulated  fortunes 
even  if  distributed  among  the  many  would  not  materially  improve 
the  conditions  of  the  masses  and  that  the  main  trouble  has  been 
insufficieiit  production,  rather  than  unjust  distribution.  Now  there 
is  the  hope  of  much  more  efficient  producti<m.  All — labt)r,  capital, 
and  the  public — seem  to  agree  that  if  it  is  possible  labor  should 
receive  more.  It  is  therefore  to  be  expected  that  labor  will  receive 
higher  wages  than  ever  before  if  the  expected  increase  in  efficiency 
is  realized,  provided  of  course  the  employer  can  find  a  market  for 
his  product.  Even  if  higher  wages  are  paid  as  production  increases 
per  man  and  the  costs  of  production  are  thus  largely  stabilized,  will 
prices  of  the  product  not  have  to  be  cut  in  order  to  find  a  market^ 


30  KCONOMKS   or   Tin-:    f;ONSTRUCTION    INDUSTRY. 

Without  attcuiptiiig  here  the  tusk  of  prophosyhig  the  exact  course 
of  prices  as  affected  by  increased  volume  of  production,  we  desire  to 
point  out  a  few  ])er(iMetit  facts  relating  to  the  probable  demand  for 
coinniodities  in  the  forthcoming  mcmths  and  years. 

Abnormal  demand  for  construction  materials. 

There  arc  many  reasons  for  expecting  a  demand  for  commodities 
in  the  after-war  period  greater  than  normal.  Only  some  of  the  most 
important  reasons  will  be  touched  upon  here. 

There  will  be  a  tremendous  demand  for  commodities  for  rebuilding 
the  regions  devastated  by  the  war.  Buildings,  bridges,  roads,  and 
other  improvements  have  been  destroyed  and  must  be  replaced  in 
France,  Belgium,  Serbia,  Roumania,  Poland,  and  in  other  countries. 
It  is  neither  p()ssil)le  nor  necessary  here  to  attempt  a  statistical  com- 
putation of  the  tons  of  material  or  the  thousands  of  men  required 
for  this  reconstruction  work.  It  is  evident  that  here  alone  is  a  work 
of  great  magnitude  calling  for  abnormal  activity  of  postwar  industry. 

In  the  nondevastated  regions  of  the  belligerent  countries  production 
of  durable  goods  not  necessary  for  military  purpose  was  largely 
neglected  durhig  the  \var  and  in  many  instances  prohibited.  The 
nations  of  the  world  are  suffering  a  shortage  of  houses  running  into 
])illions  of  dollars.  Accordmg  to  Jacques  Greber,  chairman  of  the 
French  commission  on  reconstruction,  visiting  the  United  States  in 
June,  1919,  sixteen  billions  of  dollars  will  be  required  to  replace  the 
structures  destroyed  in  France,  makmg  no  allowance  for  the  con- 
struction deferred  by  the  war.  Roads  and  railways  have  deteriorated 
dm-mg  the  war  and  must  be  improved.  In  the  United  States  par- 
ticularly a  campaign  for  good  roads  under  way  before  the  war  wOl 
now  be  pressed  with  renewed  vigor.  For  this  purpose  not  only  great 
quantities  of  sand  and  gravel  and  other  raw  materials  but  much  road- 
constnictuig  macliinery  will  be  needed,  and  the  railway's  will  be  called 
upon  to  transport  road-makmg  material  m  unprecedented  quantities. 
Industrial  equipment  m  some  industries  has  not  been  kept  in  a  state  of 
repair  and  wiU  need  to  be  repaired  or  renewed  and  increased.  The 
shipbuilding  activity  rei)airing  the  losses  inflicted  by  the  submarine 
as  well  as  to  permanently  strengthen  our  Navy  will  require  the  labor 
of  many  tliousands  of  men  more  than  were  formerly  engaged  in  this 
industry  in  peace  times  and  great  c^uan titles  of  iron  and  steel  and  other 
commodities.  In  many  countries  the  development  of  water  power 
was  seriously  being  contemplated  before  the  war  and  wiU  now  m  the 
post-war  period  receive  renewed  attention.  In  the  United  States  Con- 
gress will  hardly  delay  longer  in  making  possible  the  utilization  of  our 
enormous  water  power  nt)w  largely  going  to  waste.  Switzerland, 
which  suft'ered  greatly  durhig  the  war  for  lack  of  fuel,  will  lose  no 
time  in  getting  under  way  the  development  of  its  magnificent  water 
power,  and  in  other  countries,  as,  for  example,  in  Italy,  great  activity 


ECOlSrOMICS    OF   THE    COISTSTRUCTION    INDUSTRY. 


37 


in  electrification  may  be  expected  not  in  the  remote  but  in  the  imme- 
diate future.  Development  of  waterways  also  may  be  expected  to  be 
pushed  with  vigor.  These  pomts  need  only  to  be  mentioned  to  bring 
the  realization  of  a  tremendous  potential  demand  for  commodities 
which  will  become  active  once  the  burden  of  doubt  and  uncertainty 
is  removed  from  the  shoulders  of  the  industry  of  the  world.  It  should 
not  be  forgotten  also  that  the  mdustries  called  upon  to  supply  mater- 
ials for  the  building  of  houses,  roads,  railways,  bridges,  factories,  ships, 
power  plants,  etc.,  will  themselves  need  materials  in  turn.  Steel 
mills,  lumber  mills,  smelters,  cement  mills,  etc.,  will  require  coal  and 
machinery  on  an  enormous  scale. 

Abnormal  demand  for  consumers'  goods. 

But  not  only  will  there  be  an  unprecedented  demand  for  materials 
for  the  construction  of  tools  of  industry  w4th  which  to  mcrease  pro- 
duction such  as  houses,  railways,  factories,  water  powers,  and  ships, 
but  an  exceptional  demand  for  consumers'  goods  uidess  checked  by 
incidcated  habits  of  thrift.  The  war  waged  upon  such  a  tremendous 
scale  has  given  new  experiences  to  a  large  share  of  the  world's  inhab- 
itants, has  tauglit  them  new  wants  which  they  will  strive  to  satisfy 
in  the  future.  This  is  a  matter  of  such  importance  that  it  deserves 
somewhat  detailed  consideration.  It  is  a  subject  concernmg  which 
doubtless  many  books  will  be  written  in  the  next  generation.  Let 
us  consider  first  the  case  of  the  men  mobilized  during  the  war.  The 
Current  History  Magazine  for  February,  1919,  gives  the  following 
figures  as  representing  the  mobilized  strength  of  the  belligerents 
during  the  war: 


United  States 4,  272,  521 

British  Empire 7,  500,  000 

France 7,  500,  000 

Italy 5,  500,  000 

Belgium 267,  000 

Russia. 12,  000,  000 


Japan 

Roumania.  . 

Serbia 

Montenegro . 
Greece 


800,  000 
750,  000 
707,  34.3 
50,  000 
230,  000 


Portugal . 


100,000 


Total  allies 39,  676,  864 


Germany 11,  000,  000 

Austria-Hungary 6,  500,  000 

Bulgaria 400,  000 

Turkey 1,  GOO,  000 


Total  central  powers.  .    19,  500,  000 


Grand  total 59,  176,  864 


Consider  this:  A  number  of  men  greater  than  the  total  pojnilation 
of  either  France,  Great  Britam,  or  Italy  or  three-fifths  that  of  the 
United  States  lifted  out  of  the  customary  round  of  thmgs  and  ]>laced 
in  a  new  environment,  learnuig  to  wear  dift'erent  ap]")arel,  learning  to 
eat  different  food,  learning  the  thrill  of  doing  new  thmgs  and  seeing 
new  places.  For  some,  of  course,  the  range  of  new  experiences  was 
wider  than  for  others.  It  may  be  said,  perhaps  with  more  grim  humor 
than  truth,  that  the  soldiers  of  the  central  powers  and  the  Russians 
probably  learned  little  but  privation  with  respect  to  food  and  clothes. 


1371 


0\} 


.38  ECONOMICS    or   TFIK    COXSTItCCTION    INDUSTRY. 

Kvcn  if  we.  should  ((Micedi^  that  some  soldiers  tlirough  lack  of  supplies 
lennied  to  like  u<>  new  foods  nor  to  like  new  kinds  of  clothing;  from 
lirst-hand  ex])ericrice,  all  must  have  seen  unaccustomed  articles  of 
food,  apparel,  and  olhcr  articles  to  which  thev  took  a  fancy  and  which 
they  will  want  in  the  future. 

It  is  j)articularly  those  soldiers  of  the  allied  armies  who  saw  over- 
seas service  and  were  at  the  same  time  sup})lied  with  the  means  of 
livinix  fts  well  as  war  conditions  permit  who  will  be  found  in  the 
future  to  have  developed  new  desires  which,  if  gratified,  will  involve 
on  their  part  heavier  consumption  of  goods.  On  November  1 1,  1918, 
the  number  of  American  soldiers  hi  Europe  or  on  the  way  was 
2,05;} ,347.  Furthermore  the  number  in  the  Navy  was  529,544. 
Canada  sent  overseas  800,000  men,  Australia  sent  abroad  336,000, 
and  India  sent  to  France,  Mesopotamia,  Egypt,  Gallipoli,  Saloniki, 
Aden,  and  to  the  Persian  Gulf  953,374  native  troops  and  219,534 
British  troops.  Then  practically  all  the  millions  of  British  troops 
saw  sen'ice  in  France  or  elsewhere  under  suiTomidings  wholly  new  to 
most  of  them. 

Not  only  will  these  soldiers  returning  from  the  war  be  filled  with  new 
desires  and  demand  a  broader  variety  of  commodities  than  they 
would  ever  have  thought  of  if  they  had  had  no  war  experience,  but  they 
will  infect  their  associates  at  home  with  this  contagion  of  new  wants. 

It  is  a  matter  of  historical  record  how  the  mass  movements  of  men 
at  the  time  of  the  crusades  and  the  migrations  and  voyages  after  the 
discovery  of  America  stimulated  the  commerce  and  industr)-  of  the 
world.  Tlie  world  war  has  involved  mass  movements  of  men  on  a 
vaster  scale  than  the  crusades  and  sent  more  men  overseas  in  four 
yeai-s  than  the  discovery  of  America  sent  in  a  hundred  years  and  will 
have  therefore  a  far  greater  effect  on  world  industry. 

In  addition  to  the  60,000,000  soldiers  mobilized  for  the  war  there 
must  be  considered  the  millions  of  war  workers  in  the  belligerent 
countries  turning  in  many  cases  to  new  occupations,  meeting  new 
people,  seeing  new  places,  learning  the  use  of  a  great  variety  of  new 
articles  and  services,  and  in  many  cases,  earning  higher  wages  than 
ever  before,  thus  being  able  to  enjoy  immediate  gratification  of  their 
newly  discovered  wants.  Literally  hundreds  of  thousands  of  young 
Americans  lived  in  a  large  city  for  the  first  time  in  their  lives  dm'ing 
the  war,  and  large  cities  with  the  manifold  variety  of  food  and 
clothing,  services  and  amusements  they  offer  are  veritable  schools 
for  the  diversification  of  desire.  Thousands  of  Americans  during  the 
war  coming  from  the  countrs'  or  small  villages  to  take  up  war  work  in 
tlio  cities  enjoyed  the  conveniences  of  modern  improvements  in  hous- 
ing for  the  first  time  in  their  lives.  There  is  absolutely  no  doubt  that 
t(>ns  of  millions,  one  might  say  hundreds  of  millions,  of  people  in  the 
world  in  the  postwar  period  will  w  ant — in  fact  are  now  wanting — 


ECJONOMICS    OF   THE    COXSTRUCTIOX    INDUSTRY.  89 

very  badly  numberless  things  which  they  did  not  want  before. 
Here  is  a  potential  market  for  consumers'  goods,  ofTering  to  manu- 
facturers and  dealers  such  an  opportunity  for  business  as  never  before 
existed,  provided  only  this  potential  demand  can  be  made  an  effective 
demand — in  plain  words,  provided  the  persons  who  want  these  new 
articles  can  get  the  money  to  pay  for  them.  Since  most  consumers 
belong  to  the  wage-earning  or  salaried  classes  this  is  mereh'  a  ques- 
tion of  high  wages  or  salaries  and  steady  employment,  accomi)anied 
by  increased  capacity  for  production. 

Conclusion. 

The  foregoing  facts  and  reasons,  it  would  seem,  warrant  American 
business  men  in  working  and  planning  for  an  immediate  period  of 
business  prosperity.  No  collapse  of  values  and  prostration  of  busi- 
ness has  occurred  in  the  half  ^''ear  following  the  armistice,  and  there 
is  no  reason  to  expect  such  a  contingenc}"  in  the  near  future.  The 
most  tr5'ing  period  in  the  transition  from  war  to  peace  is  past. 

There  is  a  world  shortage  of  commodities  and  the  man  first  ready 
to  meet  the  demand  will  obtain  the  most  business.  Any  decline 
in  costs  for  production  that  may  take  place  in  the  forthcoming  months 
will  not  serve  to  compensate  the  man  who  delays  business  operations 
to  take  advantage  of  it  for  the  loss  of  business  he  will  suffer  through 
his  hesitating  policj^  Much  less  will  it  give  him  an  advantage  over 
his  more  wide  awake  competitor.  Not  only  is  there  a  world  shortage 
of  commodities  which  must  inevitably  give  rise  to  a  great  demand 
for  commodities  in  the  next  few  months  but  the  demand  for  com- 
modities in  the  postwar  period  will  undoubtedly  grow  to  unheard  of 
dimensions  owing  to  the  greater  diversification  of  wants  brought 
about  as  a  result  of  the  world  war.  The  enormous  expansion  in 
human  wants,  the  strong  desire  on  the  part  of  hundreds  of  millions 
for  the  enjoyment  of  numberless  articles  and  services  they  did  not 
enjoy  before  will  result  in  a  demand  that  will  test  the  capacity  of 
world  industry  to  meet,  even  if  the  most  optimistic  hopes  for  in- 
creased efficiency  of  both  labor  and  plant  are  realized.  If  industry- 
is  properly  organized,  and  if  serious  maladjustments  can  be  avoided, 
manufacturers  can  safely  banish  all  fear  of  overproduction  and  of 
falling  prices.  The  consequences  of  falling  prices  are  less  to  be 
feared  than  the  consec|uences  of  continued  increasmg  prices,  which, 
in  the  face  of  the  demand,  may  be  halted  only  through  the  greatest 
efficiency  of  plant,  labor,  and  management. 


m.  COST  AND  SUPPLY  OF  BUILDING  MATERULSc 
SUMMARY  OF  FINDINGS. 

This  study  is  an  attempt  to  present  a  brief  history  of  the  building 
materials  industries  through  the  war  period  and,  where  possible, 
through  the  fh'st  five  months  since  the  signing  of  the  armistice. 
Completed  in  a  few  months,  it  can  not  pretend  to  be  exhaustive;  a 
thorough  investigation  of  one  industry  alone — such  as  the  lumber 
industry  or  of  the  clay  products  industry — might  well  occupy  a 
year's  time.  Containing  as  it  "does,  however,  a  rather  comprehensive 
survey  of  records  of  prices  and  production,  and  of  cost  data,  it  pro- 
vides a  not  inadequate  basis  for  an  underetanding  of  the  price  situ- 
ation as  it  affects  the  construction  industry  as  a  whole. 

A  determination  of  the  fairness  of  individual  prices  was  not  within 
its  scope.  Since  the  only  standard  of  fairness  of  the  price  of  a 
commodity  is  the  cost  of  its  production,  the  only  absolutely  safe 
basis  upon  which  to  predicate  such  fairness  is  by  an  examination  of 
the  books  of  producers.  Without  authority  it  is  impossible  to  exam- 
ine these  books,  and  this  division  has  not  had  such  authority. 

Production  costs  based  upon  an  examination  of  books  of  producers 
were  available  through  other  investigations,  particularly  through  that 
of  the  investigating  committee  of  the  Illinois  Legislature.  In  addi- 
tion, in  response  to  questionnaires  and  personal  requests  a  large 
amount  of  material  on  wages,  fuel,  and  transportation  and  other 
items  that  go  to  make  up  costs  was  received,  with  the  result  that  a 
fairly  reliable  analysis  of  the  industry  as  a  whole  could  be  presented. 

On  the  basis  of  this  study,  and  after  a  consideration  of  the  general 
economic  situation  (which  is  dwelt  on  elsewhere  in  this  report),  this 
division  has  reached  the  following  conclusions : 

1.  Tliat  production  in  most  of  the  building  materials  industries 
was  curtailed  during  the  war. 

2.  That  the  increased  prices  of  their  products  generally  must  ])e 
attributed  to  curtailed  production  and  to  increased  cost  of  labor, 
fuel,  transportation,  and  plant  maintenance. 

3.  That  any  marked  reduction  in  prices  of  l)uilding  materials  as  a 
whole  must  depend  upon  reduction  of  these  costs,  which  seems  little 
likely  to  be  realized  in  the  near  future. 

4.  That  building  materials  are  relatively  low  in  price  as  compared 
with  commodities  in  general. 

Tlie  division  believes  therefore  that  construction  in  1919  can  be 
justified  on  financial  grounds,  and  it  looks  to  public  officials  and  to 
private  and  speculative  builders  everywhere  to  resume  building. 

41 


42  Ec^oNDMirs  or  Tin;  coxsTitrcTiox  industry. 

ACKNOWLEDGMENTS. 

'Hk^  |)iiii(i|)iil  sources  of  material  Imvc  Ixmmi  other  departments  of 
the  (iovi^niinenl,  esjx'cially  the  price  section  of  the  War  Industries 
Board,  the  I'nited  .States  Geolo<2;ical  Survey,  and  the  Bureau  of  La))or 
Statistics.  The  task  has,  however,  heen  rather  more  than  an  assem- 
hling  of  materials  of  other  Itureaus.  The  tables  have,  in  nearly  all 
cases,  heen  rearranged  in  such  a  manner  as  to  present  effectively 
s])ecial  facts,  tendencies,  and  comparisons. 

Tn  many  cases  it  was  not  possible  to  carry  the  quotations  of  prices 
furnished  by  the  War  Industries  Board  forward  into  the  year  1919. 
Prices  for  1919  have  been  available  from  other  sources,  but  it  has 
been  diflicult  to  match  the  quotations,  as  the  different  sets  of  prices 
are  often  quoted  on  different  grades  of  materials,  for  different  units 
of  measure,  and  for  different  markets. 

Acknowledgment  should  be  made  of  the  valuable  cooperation  of 
the  price  section  of  the  War  Industries  Board,  the  United  States 
Geidogical  Survey,  the  Bureau  of  Labor  Statistics,  the  United  States 
Housing  Corporation,  the  United  States  Forest  Service,  the  Bureau 
of  Public  Roads,  the  Interstate  Commerce  Commission,  and  the 
Library  of  Congress. 

Appreciation  should  also  bo  expressed  for  the  courtesy  shown  by 
all  those  chaii'raen  and  secretaries  of  war-service  committees  and 
those  individual  producers  of  materials  who  have  furnished  valuable 
information  and  expressions  of  opinion  to  this  division. 

Acknowledgment  should  also  be  made  to  those  publishers  who 
furnished  copies  of  their  periodicals  from  which  much  information 
of  value  has  been  obtained,  and  also  to  those  architects  and  con- 
tract(>rs  who  furnished  figures  on  construction  costs. 

Information  of  a  special  nature  was  furnished  to  this  division  by 
the  National  Lumber  Manufacturers'  Association  and  its  numerous 
allied  organizations,  and  also  by  the  National  Association  of  Sand 
and  Gravel  Producers  and  b}'  the  Portland  Cement  Association. 

SECTION  I.  COMPARISON  OF  BUILDING  MATERIALS  PRICES  WITH 
PRICES  OF  OTHER  COMMODITIES. 

Explanation  of  index  figures. 

Table  3  gives,  for  purposes  of  comparison,  index  numbers  based 
on  wholesale  prices  through  the  war  period  on  the  following  groups 
of  commodities: 

1.  Lumber. 

2.  Basic  building  materials  (lime,  cement,  brick,  paint  ma- 

terials, etc.). 


EOOlSrOMICS    OF   THE    COXSTRUCTIOISr    INDUSTRY. 


43 


COMPARISON  OF  RISE  I 
BUILDING  MATERIALS //7z7///7^/^^//7^ 

SfEEl ) 


COMMODITIES 


U.  5    DEPARTMENT  OF  LABOR 

INFORMATION  AND  EDUCATION   SERVICE 

DIVISION  OF  PUBLIC  WORKS  AND    CONSTRUCTION  DEVELOPMENT 


CHART  I. 


44  ECONOMICS    OF   THK   CONSTRUCTION    INDUSTRY. 

3.  l^iiinlxT   and  ])uil(lin<^  lUiitci'ijiU   (in  whicli    tlic   indices  of 

1    lUid   2  liuvo  been  coinl)incd  1)y  a  system  of  weighted 
uveniges). 

4.  Iron  and  stec^l  ])ro(lu<;ts  used  in  construction  (consisting  of 

structural  steel,  bars,  nails,  rivets  and  cast-iron  pipe). 

5.  All  building  materials  (the  figure  being  combined  from  tlie 

scries  3  and  4  by  a  system  of  weighted  averages). 
r».  All   commodities   otlier    than   lumber   and  basic  building 
materials. 

7.  Farm  products. 

8.  AH  commodities. 

The  index  numbers  are  expressed  in  terms  of  the  average  for  the 
year  preceding  July  1,  1914,  as  base. 

Figures  for  the  group  of  all  commodities  are  those  of  the  Bureau 
of  Labor  Statistics,  which  probably  give  the  best  indication  of  the 
rise  in  the  general  ])rice  level  of  any  of  the  various  published  index 
numbers. 

The  lumber  series  is  taken  from  figures  compiled  by  the  Price 
Section  of  the  War  Industries  Board.  These  figures  are  based  on 
series  of  quotations  from  a  large  number  of  mills  and  of  a  large 
number  of  markets  in  various  localities  throughout  the  country. 
In  making  this  price  survey  the  War  Industries  Board  had  the  services 
of  lumber  experts  of  the  Forest  Service  of  the  Department  of  Agri- 
culture. Their  figures  form  probably  the  most  comprehensive 
survey  of  the  price  situation  with  regard  to  the  lumber  industrj' 
during  the  war  period  that  can  be  obtained. 

The  figures  for  .September,  1918,  are  given  because  the  price  level 
of  all  commodities  reached  the  maximum  point  in  that  month.  It 
may  be  seen  from  the  table  that  building  materials,  not  including 
steel,  did  not  in  the  first  quarter  of  the  cmTent  year  fall  from  the 
level  reached  in  September,  1918,  as  have  the  other  groups. 

Comparison  of  prices  of  building  materials  and  of  all  other  commodities. 

Table  3  shows  that  in  the  last  quarter  of  1918  Iniilding  materials 
prices  were  84  per  cent  above  the  prewar  level,  while  all  other 
commodities  were  113  per  cent  aboA'e  the  prewar  level. 

A  comparison  of  the  fluctuations  of  prices  of  building  materials 
and  of  all  other  commodities  is  shown  graphically  in  Chart  I. 

In  sununaiizing  wartime  i)rices  of  building  materials  the  Price 
Section  of  the  War  Industries  Board  has  stated: 

The  prices  of  all  building  materials  except  steel  responded  in  the  main  to  the  same 
causes  of  rising  Avages  and  materials  cost.  Building  materials,  except  steel,  lagged 
slightly  behind  the  prices  of  other  commodities  because  of  the  abundance  of  common 
building  materials  and  the  competition  between  the  numerous  producers  of  building 
materials.  Nevertheless,  some  prices  of  building  materials  advanced  more  rapidly 
than  th<i.«e  of  otliers.     Common  brick  prices,  despite  the  competitive  character  of 


ECONOMICS    OF   THE    CONSTRUCTION    INDUSTRY.  45 

the  brick  industry',  advanced  more  rapidly  than  cement.  This  was  due  to  the  fact 
that  the  chief  cost  of  producing  common  brick  is  labor  and  that  when  the  demand 
is  not  suflicient  to  cover  rising  wages  cost,  the  brick  manufacturers  will  close  their 
plants  and  thereby  curtail  production  and  prevent  the  overstocking  of  the  market. 
Cement  producers,  on  the  other  hand,  with  their  high  overhead  costs  are  tempted 
to  run  their  plants  at  full  capacity  even  though  they  must  lower  their  prices  to  sell 
their  entire  output.  Stone  prices  exhibited  several  tendencies.  Indiana  limestone 
maintained  a  high  level  of  prices,  but  building  gianite  lagged  far  behind  other 
building  materials  because  of  the  competition  with  granite  of  stone,  cement, 
brick,  and  hollow  t,ile.  Structural  steel  prices,  of  course,  far  outstripped  prices 
of  all  the  building  materials  because  of  the  heavy  demand  for  eteel  during 
the  war.  In  sharp  contrast  to  steel  is  the  price  of  rubber  roofing,  which  remained 
almost  stationary  on  account  of  the  relatively  low  price  of  rubber  during  the 
war.  Lumber  prices,  on  the  whole,  did  not  rise  quite  as  fast  as  those  of  other  building 
materials,  but  if  yellow  pine  and  Douglas  fir,  the  chief  building  woods,  be  considered 
the  rise  in  the  price  of  lumber  was  almost  the  same  as  that  of  other  commodities. 
Prices  of  lumber,  hollow  building  tile,  and  sanitary  ware  all  advanced  in  proportion 
to  the  average  rise  in  the  cost  of  labor  and  other  building  materials. 

Comparison  of  prices  of  lumber  and  of  farm  products. 

Lumber,  as  a  group,  during  the  last  quarter  of  1918  was  73  per  cent 
higher  than  in  the  prewar  year.  The  farm  products  group  showed 
an  increase  of  116  per  cent  at  the  same  time.  The  indices  show  that 
at  the  beginning  of  the  year  1919  a  farmer  could  exchange  a  certain 
amount  of  his  produce  for  25  per  cent  more  of  lumber  than  the  same 
amount  of  produce  would  have  brought  him  in  the  year  preceding 
the  war. 

Shrinkage  of  the  prewar  dollar  in  terms  of  commodities. 

Chart  II  shows  graphically  tlie  increases  in  price  indices  of  the 
following  four  groups:  Farm  products,  lumber,  building  materials 
(not  including  steel),  and  all  commodities  other  than  building  mate- 
rials. The  circles  in  the  center  of  the  chart  represent  the  siirinkage  of 
the  prewar  dollar,  expressed  in  terms  of  these  groups  of  commodities, 
the  shaded  portions  representing  the  residual  values  of  the  dollar 
in  terms  of  these  several  price  levels.  Roughly  speaking,  by  the 
end  of  1918  the  prewar  dollar,  as  expressed  in  terms  of  farm  products, 
had  shrunk  to  46  cents;  as  expressed  in  terms  of  lumber,  it  had  fallen 
to  58  cents;  in  terms  of  building  materials  (not  including  steel),  to 
54  cents;  and  in  terms  of  all  commodities  other  than  building 
materials,  to  47  cents. 

Building  materials  prices  compared  with  prices  of  iron  and  steel  products. 

A  comparison  of  conditions  in  the  building  materials  industries 
and  the  iron  and  steel  industry  is  of  so  nmcli  interest  that  it  has 
been  made  the  subject  of  the  second  section  of  this  chapter,  where  this 
comparison  is  presented  in  some  detail. 


46 


ECONOMICS   or   TIIK   CONSTRUCTION   INDUSTRy. 


Prices  of  individual  commodities  in  the  buildings  materials  group. 

Sections  VII  to  X\'  of  this  chapter  give  summaries  of  the  informa- 
tion on  pioduc-tion  niul  prices  for  a  great  nunil^er  of  individual  }>uild- 
ing  niiilciials.  For  convenience,  these  individual  materials  arc 
classified  into  the  following  groups:  Lumber,  iron  and  steel  products 
used  in  construction,  clay  products,  quarry  products,  cement,  min- 
eral aggregate,  glass,  paint  materials,  and  miscellaneous  building 
materials. 

A  comparison  of  the  rise  of  jH'ices  of  various  groups  of  building 
materials  is  shown  in  Chart  III. 

Table  :i. — C'omparisov,  of  index  Ji'jures  on  build in[i  malericls  and  other  fjroups  of 

commodities. 

[Figures  based  on  wholesale  prices.    Base:  Average  July  1,  iyi3,  to  June  30,  lOU.] 


Period. 


1.  Lum- 
ber. 


1913 

1911 

1915 

1916 

1917 

19IS 

1917: 

First  ciuarter... 
Second  quarter. 
Third  quarter.. 
Fourth  quarter. 

191S: 

First  quarter... 
Serond  qunrter. 
Third  quarter. . 
Fourth  quarter. 

191S:  September'.., 

1919:  First  quarter. 
1919:  April 


105 
96 
94 
109 
UG 
173 


122 
150 
156 
159 


166 
176 
176 
173 

176 

173 
175 


2.  Basic 
building 

materials, 


101 
100 
97 
115 
137 
179 


131 
138 
140 
140 


154 
172 
189 
203 

198 

2a3 
200 


«    T  „™       4.  Con-  ! 
beS    stniciion      5.  All 
bSdfns    iron  and  ,  building 

mSds  I     steel     materials. 

materidlb.,  pj-g^iucts.! 


104 
97 
95 
111 
143 
175 


125 
146 
150 
152 


162 
175 
ISO 
184 

184 

184 
184 


112 
92 
102 
ISo 
208 
242 


105 
96 
96 
122 
161 
1S5 


242 


233 
203 


193 


191 
1S9 


6.  All 

other 

7.  Farm 

commod- 

products. 

ities. 

100 

98 

99 

101 

101 

103 

126 

120 

l.SO 

184 

206 

214 

100 

150 

185 

187 

ISO 

198 

186 

203 

197 

204 

201 

210 

212 

224 

213 

216 

217 

236 

206 

216 

211 

■22i 

8.  All 
commod- 
ities. 


100 
99 
100 
12-3 
175 
197 


155 
179 
184 
ISl 


187 
192 
202 
205 

207 

200 
203 


1  Month  of  maximum  level  for  prices  of  all  commodities. 

Base:  In  all  cases,  average  of  indices  for  the  year  July  1,  1913,  to  June  30,  1914. 

1.  Lumber:  Index  figures  of  price  section  of  War  Industries  Board.  2.  Basic  building  materials:  Does 
nnt  include  lumber  or  steel.  3.  Lumber  and  building  materials:  Doe«  not  include  steel.  4.  Construction 
iivinand  steel  products:  For  method  of  obtaining  figures,  see  Section  VIII.  5.  All  building  materials: 
V\>is:hted  averages  of  figures  in  series  3  and  4.  6.  All  other  commodities:  Figures  computed  bv  T.  S. 
Uolden  from  data  obtained  from  Bureau  of  Labor  Statistica.  7.  Farm  product.^:  Figures  of  Bureau  of 
I.,-.')or  Siaiistics  reduced  to  new  base.  8.  All  commodities:  Figures  of  Bureau  of  Labor  Statistics 
reduced  to  new  base. 


ECONOMICS  OF  THE   CONSTRUCTIOX   IXDUSTRY 


FARM  PROD. 

116% 


OTHER  COM 

115% 
FIGURES  FOR  LAST 

QUARTER  QFI9IB 


1 


BLDG. 

(NOT  INCLUDING 


LUMBER 


73% 

— ^ 


<<^ 


1 

i 


> 


Farm  Prod. 


Blde.  Mat    Other  Com. 

From  the  year  precedinb  July.  i9I4. 
the  dollar.  expressed  in  terms  of 
the  above  groups  of  commodities, 
shrunk  to  theam0unt5 indica ted  in 
the  shaded  portions  of  the  circles 


COMPARISON  OF  RISE  IN 


OTHER  COMMODITIES 

U.S.  DEPARTMENT  OF  LABOR 

INFORMATION  AND  EDUCATION  SERVICE 

DIVISION  OF  PUBLIC  WORKS  AND    CONSTRUCTION  DEVELOPMENT 

CHART  II. 


48 


ECONOMICS   OF  THE   CONSTRUCTION   INDUSTRY. 


FIGURES  FOR  LAST  QUARTER  OF  J91B 

Pf^e-Wdt"  Level  =  Ave^^ge  from 
July  I.  1913   to  June  30. 19 14 

PORTLAND  CEMENT 

(PIdnt  Pr/cesJ 


MINERAL  AGGREGATE 

fP/dnt  Prices) 


COMMON  BRICK 


OTHER 
CLAY  PRODUCTS 


BUILDING    LIME. 


STRUCTUALE-^'^'^.ll 

It  -r  fsr 


BLDG.  GLASS 

(N.YMdrhEf.ApK  1919) 


COMPARISON  OF  RISE 

IN  VARIOUS  BUILOING 

MATERIAL  GROUPS 

U.S.  DEPARTMENT  OF  LABOR 

INFORMATION  AND  EDUCATION  SERVICE 

DIVISION  OF  PUBLIC  WORKS  AND   CONSTRUCTION  DEVELOPMENT 


;hart  in. 


ECONOMICS    OF    THE    CONSTRUCTION    INDUSTRY.  49 

SECTION  II.  COMPARISON  OF  PRICES  OF  IRON  AND  STEEL   PRODUCTS 
WITH  PRICES  OF  BUILDING  MATERIALS. 

Importance  of  steel  prices  in  comparison  with  building  material  prices. 

Prices  of  steel  have  been  regarded  with  considerable  interest  both 
through  the  war  period  and  during  the  period  of  readjustment.  The 
subject  of  ])roduction  and  prices  of  iron  and  steel  is  by  far  too  large  a 
one  to  go  into  extensively  within  the  scoj^e  of  this  re])ort.  Further- 
more, the  iron  and  steel  ])roducts  used  in  construction  form  only  a 
small  part  of  the  total  amount  of  iron  and  steel  jn-oducts.  However, 
it  is  of  great  interest  to  make  a  brief  smnrey  of  the  history  of  the  steel 
industry  through  the  war  period  by  way  of  contrast  with  the  building 
materials  industry.  Various  iron  and  steel  products  were  regarded 
as  essential  for  v\unning  the  war,  and  j^roduction  had  to  be  main- 
tained at  the  highest  possible  level.  On  the  other  hand,  the  manu- 
facture of  building  materials  was  regarded  as  unessential,  and  ])roduc- 
tion  of  these  items  was  specifically  curtailed  by  Government  order. 

Brief  survey  of  the  steel  industry  through  the  war  period. 

The  year  1914  was  one  of  the  worst  in  the  history  of  the  trade. 
This  is  clearly  shown  in  the  low  prices  for  that  year,  which  was 
marked  by  dechning  jjrices,  reduced  production,  slack  demand,  and 
poor  financial  results. 

The  "ear  1915  was  the  year  of  recovery.  War  orders  for  the 
enten*'"  'Jlies  began  to  figure  largely,  the  demands  for  steel  produc- 
tior,  e  greatly  increased  and  prices  advanced  in  the  second  half 
of  ibf  ^  '^'"^. 

TL^  —XV  1916  was  the  most  prosperous  in  the  liistoiy  of  the 
indust)^--^!*) 'to  that  time.  Prices  advanced  considerably,  demand 
incrc.  ,  earaings  of  the  companies  were  very  large.     Labor 

also  sLa,red         he  i>rosperity,  and  adAances  in  wages  were  fre<{uent. 

The  year  1917  was  marked  by  the  entry  of  this  countiy  into  the 
war.  It  soon  developed  that  a  very  large  i)ro])ortion  of  the  steel 
outi:>ut  of  the  country  would  be  needed  for  war  uses.  Prices  of  steel, 
iron,  and  coke  soared  to  unprecedented  levels  until  the  Government 
found  it  necessary  to  fix  prices  on  these  ]>roducts.  The  Government's 
fixed  ]>rices  ruled  the  markets  from  the  last  quarter  of  1917  until 
the  end  of  1918. 

War-time  production  of  steel. 

Statistics  })ub]ished  by  the  American  Iron  and  Steel  Institute  in 
February,  1919,  give  figures  for  the  production  of  steel  up  to  and 
including  the  year  1917.  A  comparison  of  1917  figures  with  those 
for  1913  is  of  considerable  significance.  They  show  an  increase  of  41 
per  cent  in  steel  castings;  44  per  cent  in  ])lates  and  sheets;  29  i)er  cent 
in  wire  rods;  5  per  cent  in  structural  shapes;  57  ]>er  <  en  tin  merchant 

1L'1L'07°— 10 4 


50  ECONOMICS   OF   THE  CONSTRUCTION   INDUSTRY. 

})rtrs;  4S  ]>c\-  rent  in  coiki-cIc  bars;  mid  u  rcdurfion  of  16  ]>er  cent  in 
iron  and  stool  mils.  Tlio  total  prodiKtion  of  all  grades  of  ])ig  iron 
in  1917  was  2.")  ])or  cont  groator  than  in  J9i;;,  and  in  1918  30  por  cont 
greater  tlian  in  l!)l.'];  steel-making  iron  in  1918  was  4  ]jer  cent 
groator  in  <-|nantity  than  iti   1017. 

Steel  prices. 

A  history  of  steel  })rioes  is  shown  fairly  comjjlctely  in  Table  4. 
Prices  advanced  rapidly  from  the  second  half  of  the  year  1915. 
With  the  entry  of  the  I'nited  States  into  the  war,  the  market 
began  to  soar.  The  table  shows  that  on  the  average  finished,  steel 
prices  in  Jniy,  1917,  were  3.79  times  the  figure  for  the  year  preceding 
July,  1914.  The  month  of  Jidy.  1917,  was  the  time  of  the  highest 
steel  prices.  Prices  declined  by  a  small  jimount  until  the  Govern- 
ment assumed  control  in  November.  During  the  period  of  Govern- 
ment control,  there  were  some  slight  fluctuations  in  the  scale  of 
prices.  As  shown  in  the  table,  the  index  figure  at  the  time  of  the 
armistice  was  228.  The  prices  fixed  by  the  Government  were 
necessarily  high,  as  the  principal  desire  was  to  encourage  maximum 
production;  this  end  could  be  attained  onl}-  through  guaranteeing  a 
fair  i^rofit  to  those  producers  whose  costs  were  highest. 

Early  in  1919  the  industry  announced  reduotions  on  various  items. 
Tliis  reduction  brought  the  index  figure  on  steel  products  down  to  217. 
The  declines,  however,  were  not  considered  by  the  buying  public  as 
sufficient  to  interest  them.  In  February  the  amount  of  unfilled  orders 
on  the  books  of  the  United  States  Steel  Corporation  had  fallen  to  a 
lower  figure  than  for  any  jH'evious  month  since  October,  191.">. 
Although  the  Inning  pu])lic  did  not  respond  to  the  declines  in  prices 
early  in  the  year,  the  steel  companies  adopted  a  j^olicy  of  waiting 
until  such  a  time  that  further  reductions  would  tend  to  increase 
business  rather  than  to  encourage  the  public  to  wait  even  longer. 

Finally,  on  March  20,  after  conference  with  the  Industrial  Board 
of  the  Department  of  Commerce,  the  committee  representmg  the 
steel  companies  announced  a  new  schedule  of  steel  prices.  Tlie 
new  schedule  presented  an  all-round  reduction  of  14|-  per  cent  from 
November,  1918,  prices.  The  index  for  prices  obtauiuig  after  the 
new  schedule  was  announced,  is,  as  shown  in  Table  4.  195. 

Rise  in  wages  in  the  steel  industry. 

Figures  recently  published  give  the  average  wages  per  employee 
per  month  paid  by  the  Bethlehem  Steel  Corporation.  These  figures 
show  that  in  1918  the  average  earnings  received  were  exactly  double 
the  average  for  1914.  This  increase  is  believed  to  be  typiciil  of  the 
entire  industry.  It  is  probable  that  these  figures  include  a  certain 
proportion  of  overtime  pay,  and  that  the  average  earnings  per  month 


ECONOMICS   OF   THE    COXSTRUCTIOX   INDUSTRY.  51 

per  employee  were  somewhat  less  after  the  armistice,  without  any 
reduction  in  the  wage  scale. 

Ou  April  9,  1919,  a  statement  was  made  by  Judge  Gary,  spcakino- 
for  the  United  States  Steel  Corporation,  as  follows:  ''For  1913  the 
direct  cost  of  labor  for  ore,  coal,  and  stone  through  to  the  finished 
product,  inclusive,  but  exclusive  of  labor  in  transportation,  was 
$15.13  per  ton,  and  at  present,  on  the  basis  of  March  wage  scales, 
it  is  $34.(31,  or  an  increase  of  $19.48  per  ton." 

Early  m  1919,  at  the  time  the  first  reductions  in  steel  were  made. 
Judge  Gary  announced  that  it  was  the  policy  of  the  United  States 
Steel  Corporation  to  maintain  the  existing  wage  scale.  On  March  20, 
when  the  new  schedule  of  steel  prices  was  announced,  the  committee 
of  steel  men  stated  that  the  new  schedule  was  the  lowest  consistent 
with  production  costs  based  on  the  current  wage  scale. 

Fuel  and  raw  materials  prices. 

Not  only  has  labor  cost  increased,  but  the  costs  of  fuel  and  of 
raw  materials  have  gone  up  along  with  the  other  elements  of  produc- 
tion. The  increase  in  prices  of  Connellsville  coke  and  iron  ore 
(Messabi,  common,  non-Bessemer,  51^  per  cent)  are  shown  in  com- 
parison with  the  rise  in  pig  iron  (basic)  in  Table  5  and  Chart  IV. 
Chart  V  is  appended  showing  the  fluctuations  in  prices  of  steel  rails 
(standard,  open-hearth) . 

Comparison  of  building  materials  prices  with  prices  of  iron  and  steel. 

The  comparative  figures  on  the  steel  products  group  and  the 
buildmg  materials  group  (not  including  steel)  are  shown  in  the 
table  below : 

Comparison  of  indices  on  finished  steel  products  and  buiidin'i  materials  'not  inclvding 

steel). 


Steol  Building 

products,      materi'als. 


Julv  1,  1913,  to  June  30,  1914 1  lOD  IW 

July,  1917 379  a  150 

November,  191S 22S  1S3 

Mar.  1,  1919 217  1S4 

Mar.  25,  1919 '  195  1S4 

a  Figure  for  third  quarter,  1917. 

There  was  this  difference  in  the  conditions  that  determined  prices 
on  steel  and  on  basic  building  materials:  In  the  case  of  materials 
regarded  as  not  essential,  such  as  most  of  the  building  materials 
other  than  steel,  the  price  whether  fixed  by  the  Government  or  in 
the  open  market,  was  not  sufficiently  high  to  keep  all  producers  in 
the  market,  simply  because  the  maximum  production  was  not 
required  by  the  war-time  needs  of  the  country.     In  fact  construction 


('. 


52 


ECONOMICS   OF   THE   CONSTRrcTION   INDUSTRY. 


itself,  as  avcII  as  production  of  various  ])uil<ling  materials,  was 
specifically  curtailed  ])y  governmental  order. 

Figures  of  tho  United  States  Geological  Survey  s]\(t\\'  that  actual 
production  of  common  lime  in  1018  was  20  per  cent  less  than  in  1917. 
Portland  cement  pro(hued  in  1918  was  23  per  cent  inider  the  1917 
figure.  Lumber  production  in  1918  was  10  per  cent  less  than  in 
1917  and  19  per  cent  less  than  in  1910.  Common  brick  in  1917  was 
21  per  cent  under  191(5.  It  has  been  estimated  that  in  1918  the 
production  of  common  brick  was  less  than  half  the  1917  figure. 

As  a  consequence,  the  markets  have  been  understocked  rather  than 
overstocked  in  these  commodities.  If  any  one  of  these  commodities 
had  been  considered  as  essential  as  steel,  the  Government  would  have 
been  obliged  to  fix  the  prices  on  them  at  figures  high  enough  to 
encourage  every  producer  in  the  countr}'  to  run  his  }tlant  at  maximum 
capacity  with  a  guarantee  of  a  reasonable  profit  on  his  output.  In 
that  case  the  prices  on  these  commodities  would  have  reached  much 
higher  levels  than  they  actually  did. 

Iron  and  steel  products  used  in  construction. 

Iron  and  steel  products  used  in  construction  are  considered  in 
Section  VIII  of  this  chapter,  together  with  some  figures  on  the  increase 
in  freight  rates  on  pig  iron  and  finished  steel. 

Table  4. — Prices  of  iron  and  steel  products. 
[Prewar  prices=average  July  1,  1913,  to  June  30,  191-1.] 


Commodity. 


Prewar 
price. 


Julv, 
1917. 


Novem- 
ber, 191S. 

Mar.  1, 
1919. 

$33.00 
24S 

$30.00 
225 

$47.  .50 
21S 

$43.50 
199 

$.51.00 
225 

$47.00 
207 

S2.90 
230 

$2.  70 
214 

$2.90 
230 

$2.70 
214 

$3. 2.5 
2.58 

$3.00 
238 

$3.00 
237 

$2.80 
221 

$57.00 
226 

$57.00 
236 

$3.2.5 
230 

$3.25 
230 

$3.50 
219 

$3.50 
219 

$5.00 
253 

$4.70 
237 

Mar.  25, 
1919. 


1.  Pig  iron,  basic: 

Quoted .  per  long  ton 

Relative 

2.  Billets,  4-inch: 

Quoted,  per  long  ton 

Relative 

3.  Sheet  bars: 

Quoted,  per  long  ton 

Relative 

4.  Pkelp,  grooved: 

Quoted .  per  hundredweight 

Relative 

5.  Merchant  bars,  base: 

Quoted,  per  hundredweight 

Relative 

6.  Plates,  tank: 

Quoted,  per  hundredweight 

Relative 

7.  Structural  steel,  base: 

Quoted,  per  hundredweight 

Relative 

8.  Wire  rods: 
Quoted,  per  long  ton $25.20S3 


$13.3183 
100 


$21. 8333 
100 


?22.  b750 
100 


$1.26 
100 


$1.26 
ICO 


$1.26 
100 


$1.  2675 
100 


Relative. 

9.  liain  wire: 

Quoted .  per  hundredweight . 
Relati  ve , 

10.  Nails,  wire: 

Quoted,  per  hundredweight. 
Relative 

11.  Blacksheets,  No.  2,s: 
Quoted,  per  hundredweight. 
Relative , 


100 


$1.4125 
100 


$1.5975 
100 


$1.9.*' 
100 


$52.  .50 
394 


$95.00 
435 


$105.00 
463 


$6.00 
476 


$4.  .50 
357 


$9.00 
714 


$4.50 
356 


$96.25 

3'52 


$3.95 
280 


$4.00 
250 


$s.00 
404 


S25.75 
193 


$38.50 
176 


$42.00 
185 


$2.45 
194 


$2.35 
187 


$2.65 
210 


S2.45 
193 


$52.00 
206 


$3.00 
213 


$3.25 
204 


$4.35 
220 


I 


121297"— 19,     (To  fac«  pas**  52.) 


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1   1 

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KELATIVEPRlCMOr 

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PIG   IRON 
IRON  ORE             COKE 

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AURAflE  oyoreDPRlcesdUaias"^ 

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LM^E«4-100( 
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1S.5        1       .914        1       19,5        1       ,9.»       II 

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V 

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■ 

s  i  ii  i  i  Si 

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.9,5       1      ,9K 

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s  i  i  i  i  Ji  s  <  .4 

13,4               I9.»        L 

""'— 

ECONOMICS   OF   THE   CONSTRUCTION   INDUSTRY. 

Table  4. — Prices  of  iron  and  steel  products — Continued. 


53 


Commoditv. 


Prewar 
price. 


July, 
1917. 


Novem- 
ber, 1918. 


Mar.  1. 
1919. 


Mar.  25, 
1919. 


12.  Sheets,  V)lue  annealed,  No.  10: 

Quoted,  per  hundredweight J1.49S3 

Relative 100 

13.  Galvanized  sheets,  No.  28:  I 

Quoted,  per  hundredweight '  ?2. 98.W 

Relati  ve \  100 

J4.  Tin  plate,  14  by  20  inches:  j 

Quoted ,  per  hundredweight $3. 4375 

Relative 100 

15.  Hoops,  base:  ; 

Quoted,  per  hundredweight Sl.3917 

Relative I  100 

16.  Rails,  Stand.  Bessemer: 

Quoted,  per  long  ton i  $28.00 

Relative 100 

17.  Rails,  Stand.  O-H:  I 

Quoted,  per  long  ton '  $30.1467 

Relative j  100 

AVeighted  average  of  finished  steel  products. .  |  100 


$8.23 
551 


$10.  .50 
352 


$12.  00 
349 


$.5.50 
395 


$38.00 
136 


$40.00 
133 


379 


$4.25 
284 


$6.25 
209 


$7.  75 
225 


$3.50 
251 


$55.00 
196 


$57.00 
189 


228 


$5.90 
261 


$6.05 
202 


$7.  35 
214 


$3.30 
237 


$55. 00 
196 


$57.00 
189 


$3.55 
237 


$5.  70 
191 


$7.00 
204 


$3.05 
219 


$45.00 
161 


$47.00 
156 


Authorities:  All  except  Nos.  7  and  10  from  Bulletin  No.  5,  price  section.  War  Industries  Board,  Novem- 
ber 1918;  later  figures  from  the  Iron  Age;  Nos.  7  and  10  from  the  Iron  Age. 

Table  5. — Comparison  oj  prices  on  iron  ore.  cole,  and  pi(j  Iron. 


1.  Iron 

ore. 

2.  Coke. 

3.  Pig 

iron. 

Period. 

Price  per 
ton. 

Relative 
price. 

Price  per 
short  ton. 

Relative 
price. 

Price  per 
long  ton. 

Relative 
price. 

Bfise 

1913 ^ 

$3. 3083 

3.4000 
3.  0333 
2.S250 
3.  6750 

5.0500 
5.0500 
5.  0500 
5.0500 

5.0500) 
5.  0500 
5.3500 
5.7500 

5.7500 
5.  7500 
5.  7500 
5.7500 

100 

103 
92 
85 

111 

153 
153 
1.53 
153 

153 
153 
162 
174 

174 
174 
174 
174 

$2. 0625 
2.  439f; 

I.  ms3 

1.  7.S.D4 
.      3. 2458 

:.  7,500 
7.9167 
11.3333 
6.0000 

6.0000 
6.0000 
6.0000 
6.0000 

5.  6500 
4.  440CI 
4.  1250 
4.0000 

100 

lis 

87 
157 

376 
384 
549 
291 

291 
291 
291 
291 

274 
215 
200 
194 

$13.3183 

14.7058 

12.  .'<733 

13.  7408 
19.7600 

30.  6923 
42.9231 
49.0000 
33.0000 

33.0000 
32.  00f»0 
32.0000 
33.0000 

30.0000 
30.  000(1 
30.  0000 
27.  8750 

IOC 

no 

1914 

97 

1915 

103 

1M6 

14S 

1917,  by  quarters: 

First : 

Second 

Third 

Fourth 

230 

322 
368 
248 

1918,  by  qu;u-ters: 

First 

248 

Second  

240 

Third 

240 

Fourth 

248 

1919,  by  months: 

225 

February 

March  11 

225 
225 

March  27 

209 

1.  Iron  oic,  Musalji,  non- Bessemer,  5li  per  cent;  market,  Lower  Lake  Ports;  source.  Iron  Trade  Review, 
2.  Coke,  Conriellsville,  furnace;  market,  f.  o.  1).  ovens;  .source.  The  Iron  Age.  3.  I'ig  iron,  basic;  market, 
Malioning  or  Shenango  Valley  Furnace;  source,  The  Iron  Age. 

Base:  In  all  cases  base  equals  average  of  prices  Irom  July  1, 1913,  to  June  30, 1P14. 


54  ECONOMICS   OF   THE   CONSTRUCTION   INDUSTRY. 

SECTION  III.  COMPARISON  OF  WAR  PRK  ES  IN  AMERICA  AND  CERTAIN 

FOREIGN  COUNTRIES. 

Explanation  of  tables. 

Tables  6  and  7  show  the  index  figures  of  the  United  States  Bureau 
of  Labor  Statistics,  the  Canadian  Labor  Department,  the  London 
Economist,  and  the  Statistic^ue  Generale  of  France.  In  these  tables 
all  the  indices  are  expressed  as  percentages  of  the  1013  average. 

It  should  be  understood  that  these  different  series  of  figures  are 
not  absolutely  comparable,  since  there  is  considerable  variation  in 
the  number  of  commodities  included  in  the  different  series,  and  also 
since  there  is  considerable  variation  in  the  methods  used  for  obtain- 
ing these  average  figures. 

However,  these  figures  do  give  a  concrete  indication  of  the  trend 
of  wholesale  prices  in  these  countries,  and  comparison  of  the  figures 
for  the  several  countries  does  bring  out  certain  facts  of  considerable 
significance. 

There  are  at  hand  some  figures  on  Australia,  taken  from  the  Com- 
monwealth Bureau  of  Census  and  Statistics,  the  indices  being  aver- 
aged from  wholesale  prices  of  92  commodities.  These  figures,  being 
incomplete,  are  not  included  in  the  tables. 

The  six  tables  (8  to  13)  showing  comparisons  of  actual  prices  in  the 
United  States  and  foreign  countries  have  been  based  on  quotations 
furnished  to  this  division  by  the  price  section  of  the  War  Industries 
Board.  These  quotations  haA^e  been  reduced  to  quotations  in  terms 
of  American  money.  In  the  case  of  each  quotation  the  change  to 
American  money  was  based  on  the  actual  rate  of  exchange  that 
prevailed  during  the  period  in  question. 

The  great  preponderance  of  prices  of  iron  and  steel  products  is 
explained  by  the  fact  that  more  quotations  were  available  on  these 
commodities  than  on  other  building  materials.  While  no  foreign 
quotations  are  available  for  1919,  it  is  unlikely  that  there  have  been 
considerable  reductions,  if  any  at  all.  In  this  connection,  the  reduc- 
tions in  prices  of  American  steel  products  that  have  taken  place  in 
1919  should  be  considered. 

A  comparison  of  indices. 

As  might  be  expected,  the  countries  nearest  the  scene  of  actual 
warfare  show  greater  rises  in  the  price  level  than  have  been  evident 
in  this  country.  It  was  also  to  be  expected  that  the  rises  would 
begin  earlier  in  the  European  countries  than  the}^  did  in  this  coun- 
try. The  figures  for  1915  show  a  40  per  cent  increase  for  France, 
23  per  cent  for  England,  10  per  cent  for  Canada,  while  the  price 
level  in  this  country  remained  the  same  as  for  the  year  1913.  How- 
ever, this  country  began  to  feel  the  influence  of  war  conditions  early 
in  the  3'ear  1916,  more  than  a  year  before  we  became  an  active 
belUirerent. 


ECOK'OMICS   OF   THE   CONSTSUCTI027   IXDUSTEY.  55 

The  Australian  index  for  the  first  quarter  of  1918  was  173,  as  com- 
pared with  187  in  this  country,  194  in  Canada,  216  in  England,  and 
320  in  France.  It  is  not  surprising  that  the  general  level  of  prices 
should  be  affected  in  less  degree  in  Australia  than  in  other  countries. 

Maximum  levels  reached. 

The  highest  point,  207,  was  reached  in  this  country  in  September, 
1918.  In  Canada,  the  November,  1918,  figure,  215,  is  the  maximum. 
Great  Britain  reached  the  maximinn  in  August,  1918,  the  mdex  then 
being  233.  Of  the  figures  available  for  France  at  the  time  that 
Chart  VI  was  made,  the  greatest  is  the  one  for  May,  1918,  335, 
Figures  obtained  later  showed  the  maximum  for  France,  360,  to  have 
been  reached  in  October,  1918. 

These  maximum  price  levels  are  sho^vn  graphically  in  the  accom- 
panying chart. 

It  is  significant  that  France,  which  resorted  to  inflation  more 
extensively  than  did  either  England  or  the  United  States,  exper- 
ienced a  considerably  larger  increase  in  the  general  price  level. 

Prices  in  Great  Britain. 

Although  each  set  of  figures  is  referred  to  the  1913  figure  of  the 
particular  country  in  question  as  base,  it  is  impossible  to  say  that  a 
comparison  of  indices  indicates  more  than  the  trend  in  the  respective 
countries.  If  the  figures  of  the  London  Economist  and  those  of  the 
United  States  Bureau  of  Labor  Statistics  were  entirely  comparable, 
then  the  indices  for  March,  1918,  would  show  that  prices  for  England, 
on  the  average,  were  7  per  cent  higher  than  in  this  country. 

Perhaps  this  figure  is  somewhere  near  the  correct  indication  of 
the  difference  in  prices  in  the  two  countries.  It  is  known  that  prices 
on  a  number  of  commodities  were  liigher  in  England  at  the  beginning 
of  the  year  1919  than  they  were  in  the  L^nited  States. 

It  was  stated  early  in  1919  that  prices  on  steel  products  ran  from 
5  to  40  per  cent  higher  in  England  than  in  this  country.  That  was 
before  the  reductions  announced  in  this  country  in  March. 

In  the  middle  of  the  month  of  March  there  appeared  statements 
in  the  daily  press  to  the  effect  that  the  United  States  Army  had  been 
offered  for  certain  supplies  held  in  England  higher  prices  than  had 
been  paid  for  them  under  war  conditions. 

About  May  1,  1919,  it  was  stated  in  the  press  that  the  city  of 
Birmingham,  England,  had  placed  orders  for  steel  rails  in  the  United 
States  on  account  of  more  favorable  prices  and  conditions  of  deliver}'. 

The  British  Ministry  of  Reconstruction  has  issued  a  painjjhlet 
stating  that  while  it  expected  that  prices  would  recede  somewhat 
from  war-time  levels  it  was  out  of  the  question  tliat  they  should 
fall  to  anything  like  the  1914  level  in  tlie  near  future. 


i6 


ECONOMICS    ()T   THK    COXSTllUCTION  INDUSTRY. 


In  the  same  pamphlet  the  causes  assigned  for  the  great  increase 
of  prices  are  reduced  output,  increased  freight  rates,  limitation  of 
imports,  and  issuance  of  paper  money. 

Prices  of  building  materials  in  Great  Britain. 

The  information  at  hand  on  building  materials  in  the  British 
markets  is  ratlier  meager.  The  commodities  comprised  in  the  Lon- 
don Economist  index  figure  do  not  include  a  building-materials 
group.  It  has  been  stated,  however,  on  good  authority  that  on  the 
average  the  cost  of  building  materials  in  England  early  in  the  year 
1910  was  more  than  double  the  prewar  figure.  This  would  indicate 
that  building  materials  in  the  English  markets  have  risen  to  prac- 
ticaUy  the  same  levels  as  other  commodities. 

The  increase  of  more  than  100  per  cent  indicated  in  the  above 
statement,  compared  "with  an  increase  in  this  country  of  only  84 
per  cent,  shows  that  the  buyer  of  building  materials  in  England  is 
to-day  in  a  worse  situation  than  the  American  buyer  is. 

Some  figm-es  given  in  the  report  of  a  special  investigatmg  com- 
mittee of  the  British  Government  shows  that  as  early  as  November 
2,  1915,  certain  building  materials  showed  very  marked  increases 
over  the  prices  obtaining  at  the  outbreak  of  the  wa-.  These  figures 
are  given  in  the  following  table: 

Percentage  nf  increase  in  prices  of  huildbK)  materials  in  Sco{hni(l,from  oalbreah  of  tear  to 

Nov.  ,?,  l'J15. 


Material. 

Increase. 

Material. 

Increase. 

Per  cent. 
5 

7.5 

2.5 

110 

200 

100 

Iron 

Per  cent. 
50-100 

Fire  clay 

50 

Brick   

Galvanized  tanlcs 

75 

Wood 

Wall  paper 

25 

Zinc...          .          

White  lead. 

100 

Lead 

Oils 

20-30 

The  building  industry  in  Great  Britain  after  the  war. 

Great  Britain's  housing  needs  at  the  close  of  the  war  have  been 
variously  stated,  the  estimates  running  all  the  way  from  300,000  to 
500,000  houses.  The  Government  is  making  its  })lans  for  a  national 
house-building  project,  subsidized  by  the  State  under  arrangement 
with  various  local  governments.  It  is  considered  necessary  for  the 
Government  to  assume  part  of  the  risk  of  declining  prices,  for  other- 
wise private  builders  \vould  hesitate  to  l)uy  materials  at  prevaiHng 
figures. 

It  was  ascertained  by  a  committee  appointed  l^y  tlie  Minister  of 
Reconstruction  in  Great  Britain  *   that  sufficient  building  material 

>  Report  o(  the  Committee  appointed  by  the  Minister  of  Reconstruction  to    consider  the  position  of 
the  building  industry  after  the  war.    London,  191.S,  13  pp.  (c.  d.  9197). 


ECONOMir?  or  the  CONSTRUCTIOlSr  indt'.=;tp.y, 


57 


/iufhcn'h'es 
U.S.-  Bureau  cf  Leber  Statist  cs 
Lancda-Cdnadidn  Labor Depi 
United  KfnQdom-London  EcDt:crr//sf 

Frcnce-StdfisfiQue  Ce/ien/B 


FRANCE 

MAY  181 


PRICE    LEVEL  IN  THE  U.  S. 
AND  OTHER  COUNTRIES 

U.S.  DEPARTMENT  OF  LABOR 
INFORMATION  AND  EDUCATION  SERVICE 
DiVfSlON  OF  PUBLIC  WORKS  AND  CONSTRUCTION  DEVELOPMENT 


*  price  ievel  in  FiuDCt.  iliiAvi  o  incK.ise  of  2tU  per  tint  in  Ociobtr,  I('l.<' 
CH/\RT  VI. 


58  ECONOMICS   OF   THE   CONSTRUCTION    INHUSTIIY. 

would  not  1)0  available  in  that  country  to  acle(|uat('ly  meet  tlie  demand 
after  the  Avar.  Tliis  fact,  the  committee  stated,  would  require  a 
certain  measure  of  control.  Tlie  policy  of  control  contemplated 
was  one  which  woidd  fairly  c((ualize  supj)ly  and  demand  and  guarantee 
that  works  of  national  importance  shoiJd  receive  essential  supplies. 

The  committee  did  not  propose  to  regidate  prices.  The  principal 
means  of  regulation  advocated  related  to  the  labor  situation  and 
the  form  of  taxation. 

The  increase  in  the  production  of  building  materials  was  to  be 
secTU'ed  in  various  ways,  among  which  are  the  following: 

1.  Priority  of  demobilization  for  men  engaged  in  the  professions 
and  trades  concerned  in  the  building  industry. 

2.  Similar  priority  of  demobilization  of  men  re((uired  for  the  pro- 
duction of  building  materials. 

3.  Immediate  provision  of  labor  which  is  available  for  the  making 
of  standard  bricks. 

4.  Immediate  facilities  for  repairs,  renewals,  and  restoration  of 
building  materials  establishments. 

5.  Immediate  release  from  Government  control  of  brickyards  and 
premises  now  occupied  for  storage. 

6.  The  securing  of  adequate  sup])lies  of  fuel  and  raw  materials. 

7.  The  scrapping  of  inefficient  plants  and  introduction  of  more 
modern  appliances  and  increased  use  of  machinery. 

8.  The  use  of  local  materials  wherever  possible. 

9.  Institution  of  scientific  and  industrial  research  in  the  respective 
trades. 

10.  Financial  assistance  by  the  State  in  the  extensions  and  equip- 
ment of  work. 

1 1 .  Closer  cooperation  between  employers  and  employees,  such  as 
may  be  secured  by  the  joint  industrial  committees. 

1 2.  Early  placing  of  contracts  •  wherever  jwssible  for  postwar 
delivery  of  materials,  such  as  brick,  stone,  etc.,  in  order  to  estabUsh 
confidence  in  the  various  trades  by  the  knowledge  of  a  sufficiency  of 
work  for  some  time  in  advance. 

13.  Standardization  of  fittings  in  all  trades,  such  as  doors,  sashes, 
windows,  hardware,  and  the  like;    and,  finally, 

14.  Immediate  steps  should  be  taken  for  the  importation  of 
100,000  standards,  198,000  M  a  month,  of  softAvood  in  the  first  year 
after  the  war. 

The  report  suggests  a  rather  elaborate  machinery  for  the  purpose 
of  attaining  the  ends  desired,  with  a  system  consisting  of  a  central 
committee,  regional  committees,  and  field  agents,  the  personnel  of 
the  committees  to  be  made  up  of  architects,  civil  engineers,  sur- 
veyors, employers,  manufacturers,  distributors,  and  workmen. 


ECONOMICS   OF   THE   C'OXSTRUC"TIOX    INDUSTRY.  59 

With  reference  to  the  causes  of  unduly  high  prices  and  the  methods 
of  controlling  these,  it  was  suggested  that  these  matters  would  tenil 
to  regulate  themselves  by  increasmg  the  building  productivity  of 
the  coimtry.  As  a  means  of  increasing  the  building  production  of 
the  country  there  was  the  increasmg  demand  for  workmen's  houses. 
The  committee,  however,  looked  upon  the  building  of  workmen's 
houses  merely  as  a  supplementary  means  of  steadying  the  demand 
for  labor  and  building  material. 

Later  reports  from  England  state  that  the  Government  has  agreed 
to  guarantee  all  those  who  build  houses  in  1919  against  decline  in 
materials  prices  for  a  period  of  five  years  to  the  extent  of  75  per 
cent  of  the  depreciation  in  value  of  the  buildings  caused  by  such 
decline.  It  has  also  been  stated  that  the  Government  does  not 
expect  any  marked  declines  to  take  place  during  that  period. 

Conclusions  from  study  of  foreign  prices. 

This  brief  survey  of  foreign  prices  shows  that  the  great  rise  in 
pi'ices  during  the  war  was  a  world-wide  phenomenon.  In  all  the 
countries  studied  the  rise  in  prices  has  been  accompanied  by  a  great 
increase  in  the  amount  of  money  and  credit  mstruments  m  circula- 
tion. The  fact  that  prices  have  risen  all  over  the  world  makes  it 
extremely  unlikely  that  they  will  return  to  prewar  levels  for  a  con- 
siderable period  of  years,  if  ever. 

One  large  element  in  the  rise  of  prices  m  the  European  countries 
was  the  great  difficulty  of  importing  raw  materials  under  the  condi- 
tions of  war.  With  the  signing  of  the  peace  treaty  and  the  resump- 
tion of  trade  relations  between  nations  on  a  normal  basis,  this  diffi- 
culty should  be,  to  a  large  extent,  removed.  That  should  tend  to 
reduce  the  price  levels  in  those  countries  somewhat.  But  America, 
havmg  suffered  less  under  this  difficulty,  will  benefit  k>ss  by  its 
removal. 

The  very  fact  that  the  increases  were  so  much  greater  in  England 
and  France  than  in  this  country  would  lead  one  to  expect  greater 
proportional  declines.  This  has  actually  been  the  case  m  the  period 
following  the  attamment  of  the  maximum  levels  m  this  country  and 
in  England.  From  August,  191S,  to  February,  1919,  the  price  mdox 
of  the  London  Economist  fell  7.5  per  cent.  Dun's  mdex  figures 
indicate  a  drop  in  the  price  level  in  this  country  of  5.7  per  cent  from 
September  1,  1918,  to  March  1,  1919.  The  Bureau  of  Labor  Statis- 
tics figures  indicate  a  drop  of  only  3.4  per  cent  for  the  same  period. 
In  this  country,  after  March  1,  1919,  commodity  prices  in  general 
have  reacted  upward. 


60 


ECONOMICS   OF   THE   CONSTRUCTION   INDUSTRY. 


Tahm;  6.  —  Whohsah  prices  in  the  United  Slates  and  certain  foreii/n  coiintriet. 
[Inflcx  numlKTsrxprc'Ssod  as  percentages  of  the  index  ni!mV)er  for  1913.] 


Yearly  averages. 

1.  Tnited 

States. 

2.  Canada. 

3.  Creat 
nrilain. 

4.  France. 

1913 

KK) 
99 
100 
12S 
175 
196 

100 
100 
110 
134 
174 
205 

100 
99 
123 
160 
2W 
225 

100 

1914 

102 

1915 

140 

1916 

18J< 

1917 

262 

1918 ; .• 

339 

Commodities. 

1.  From  nuroau  of  Labor  Statistic? 294 

2.  From  Canadian  I )epail mint  of  Labor 272 

3.  Fromthc  l>ondon  Economist 44 

4.  From  the  Statisliquc  Ci6n6iale 45 

T.\BLE  7. — ^Yholesnle  prices  in  the  United  States  and  certain  foreign  countries. 
[Index  numbers  expressed  as  percentages  of  the  index  number  for  1913.] 


1914: 


1916: 


First  quiirtor. .. 
Second  quart cr. 
Third  quarter.. 
Fouilh  quarter. 


First  quarter... 
Second  quartrr. 
Third  quarter.. 
Fourth  quarter. 


1917: 


First  quarter. . . 
Second  quarter. 
Third  quarter.. 
Fourth  quarter. 


1918: 


First  quarter... 
Second  quarter. 
Third  quarter.. 
Fourth  quarter. 


1919: 


First  quarter. . . 
Second  quarter. 
Third  quarter.. 
Fourth  quarter. 


January. . 
February. 
March.... 


Highest  level. 


Quarterly  aA'erages. 


1.  Uniicd 
States. 


2.  Canada. 


100 

9S 
101 

98 

99 

991 

100  ! 

103  j 
112  ! 

117  I 
123 

141  I 

155 
179 
184 
181 

187 
192 
203 
204 

202 
197 
200 


100 
100 
100 
102 

a  103 
a  108 
a  111 
0  112 

a  127 
0  132 
al32 
0  138 

159 
175 
180 
183 

194 
203 
210 
214 

211 
206 


207  215 

^.Sept.  '18)     (Nov.  -18) 


3.  <ire;»t 
Britain. 


a  97 

o96 

o95 

olOl 

oll2 
0  124 
a  122 
al25 

0  143 
a  lo6 
o  156 
0  171 

190 
204 
209 
214 

216 
224 
231 
227 

217 
215 
212 


4.  France. 


(-\u{ 


233 

18; 


100 
100 
101 
107 

124 
135 
142 
158 

179 
190 


223 
257 
273 
292 

320 
332 
347 
357 

349 


360 
(Oct.   18) 


0  Figures  for  first  month  of  each  quarter. 


ECONOMICS   OF   THE   CONSTRUCTION    INDUSTRY. 


61 


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Chart  furnished  through  courtesy  of  Price  Section,  Wi.r  Industries  Board. 
CHART  VII. 


ECONOMICS    OF   THE    CONSTEUCTION    INDUSTRY.  Y3 

SECTION  IV.  CIVIL  WAR  PRICES  AND  THE  CIVIL  WAR  RECONSTRUCTION 

PERIOD. 

Sources  of  information. 

The  price  section  of  the  War  Industries  Board  has  made  a  study 
of  Civil  War  prices  in  comparison  witli  prices  during  the  World  War. 
This  work  has  been  done  under  the  direction  of  Dr.  Wesley  C.  Mitchell, 
who  is  also  the  author  of  a  book  entitled  ''Gold,  Prices,  and  Wages 
under  the  Greenback  Standard."  An  analysis  of  the  War  Industries 
Board  Bulletin  on  Civil  War  prices  and  a  further  investigation  of  some 
of  the  statistical  tables  in  Dr.  Mitchell's  book  bring  to  light  certain 
general  facts  of  special  interest  in  the  year  1919. 
Description  of  tables. 

The  figures  in  Tables  14  and  15  have  been  calculated  for  the  pur- 
pose of  comparison  of  Civil  War  prices  with  prices  during  the  World 
War.  The  figures  for  the  all-commodities  group  are  the  medians  of 
relative  prices  of  92  commodities  at  wholesale,  the  relative  prices  for 
each  commodity  in  the  Civil  War  period  being  based  on  the  average 
prices  of  1860  as  100  per  cent.  The  figures  for  the  World  War  period 
are  based  on  the  year  1913  as  the  prewar  standard. 

The  prices  for  the  years  ISGO  to  1874  were  taken  from  tables  in 
the  well-known  Aldrich  report.'  Of  these  92  commodities,  19  fall 
within  the  building  materials  group.  These  articles  have  been 
matched  with  the  same  number  of  similar  articles  quoted  in  the 
markets  to-day,  or  their  nearest  present-day  equivalents,  in  order  to 
obtain  comparable  figures  for  the  recent  war  period.  Medians  of 
relative  prices  were  used  instead  of  averages. 

In  making  up  the  tables  for  the  Civil  War  period,  simple  averages 
did  not  seem  to  give  a  correct  indication  of  price  relations,  because 
the  extremely  high  prices  of  some  southern  commodities  (cotton, 
tm^pentine,  tar,  etc.),  which  were  found  in  very  small  quantities  in 
the  markets,  make  the  averages  unduly  high.  There  are  no  figures 
at  hand  which  furnish  a  basis  for  a  system  of  weighted  averages. 
Consequently,  medians  have  been  chosen.  The  median  is  the  figure 
so  chosen  that,  as  of  the  particular  date,  half  of  the  prices  of  commodi- 
ties of  the  group  are  above  it  and  the  other  half  are  below  it. 

Fluctuations  of  prices  of  commodities  in  general  during  the  two 
wars  are  shown  graphically  in  Chart  VII. 
Course  of  prices  in  general  during  the  two  wars. 

A  comparison  of  the  course  of  prices  during  the  Civil  War  and  the 
World  War  shows  many  points  of  similarity  during  the  two  war 
periods.  The  course  of  prices  during  the  year  of  readjustment,  1919, 
and  the  corresponding  period  following  the  Civil  War  sliow  more 
points  of  difference  than  of  similarity. 

1  Wholesale  Prices,  Wajes,  and  Transportation,  report  by  Mr.  Aldrich  of  the  Commitloe  on  Finance; 
Mar.  3, 1893.    Senate  Report  Xo.  1394,  42d  Congress,  2d  session,  I'art  II. 


74  ECONOMiOS   OF   THE   CONSTRUCTION   INDUSTRY. 

During  both  wars  the  wholesale  prices  of  comnio<litie3  in  general 
rose  steadily  througli  the  war  period.  The  rise  during  tlic  Civil  War 
period,  with  the  year  1860  as  the  base,  runs  up  to  a  somewhat  liigher 
level  than  the  rise  during  the  World  War.  In  both  wars,  building 
materials  rose  in  price,  but  they  did  not  at  either  time  reach  leveU 
so  high  as  tlie  price  levels  of  other  commodities. 

In  short,  the  com'se  of  prices  during  the  Civil  War  showed  the  same 
general  trend  as  during  the  Vforld  War,  following  the  same  rising 
spiral,  viz,  increase  of  the  amount  of  money  in  cir^julation,  increase.! 
cost  of  living,  increased  wages,  and  increased  prices  of  commodities 
in  general,  each  factor  reacting  upon  the  rest. 
Course  of  commodity  prices  after  the  Civil  War. 

At  the  beghining  of  the  year  1865,  the  end  of  the  Civil  War  being 
in  sight,  wholesale  prices  broke  suddenly  and  violently.  During  the 
first  six  months  of  the  year,  prices  in  general  fell  oil  27  per  cent  frorrt 
the  high  level  of  January.  However,  the  break  in  wholesale  prices, 
though  unprecedented  in  violence  and  accompanied  by  the  unsettling 
influence  of  the  end  of  the  great  war,  produced  no  business  crisis  or 
depression.  Through  the  latter  half  of  1865  prices  recovered  from 
the  low  point  until  in  January,  1866,  they  stood  just  16  per  cent 
below  the  level  of  January,  1865. 

From  the  beginning  of  1866  prices  dropped  slowly  downward. 
The  downward  movement  was  quite  gradual;  the  median  for  prices 
of  92  commodities  did  not  reach  the  prewar  (1860)  level  until  the 
year  1878. 

The  cessation  of  hostilities  did  not,  of  itself,  bring  about  a  return 
of  prices  to  prewar  levels.  Indeed,  prices  did  not  return  to  prewar 
levels  until  after  other  economic  factors,  such  as  the  opening  up  of 
new  land  by  railway  construction,  the  utilization  of  improved  agri- 
cultural implements  and  other  labor-saving  machinery,  the  develop- 
ment of  foreign  trade,  and  the  organization  of  industries  for  large- 
scale  production,  had  operated  to  reduce  production  costs,  and,  in 
consequence,  wholesale  prices. 
Commodity  prices  compared  with  prices  of  gold. 

As  is  well  known,  the  period  following  the  Civil  War  was  a  i>eriod 
of  inflation  of  the  currency.  Owing  to  the  pohcy  of  the  Gk)vermnent 
with  respect  to  the  issue  of  large  quantities  of  unredeemable  paper 
money,  gold  was  quoted  at  a  premium  in  the  money  market. 

Prices  based  on.  the  greenback  currency  can  not  be  regarded  as 
otherwise  than  inflated.  However,  the  statistics  of  tbe  period  show 
that  comniodity  prices  remained  about  20  points  above  the  price  of 
gold  tltrough  the  year  1872.  They  remained  ab^>ve  the  price  of  gold 
up  to  and  including  the  year  1877. 

A  comparison  of  fluctuation  in  commodity  prices  and  gold  prices 
is  shown  in  Chart  VIII. 


ECONOMICS   OF   THE    CONSTRUCTION    INDUSTRY.  75 

The  panic  of  1873. 

The  currency  situation  in  the  Civil  War  reconstruction  period  was 
partly  responsible  for  the  sharp  fluctuations  in  prices  that  marked 
the  period. 

Besides  the  money  situation  there  were  also  the  opportunities  for 
development  of  unused  land,  rivers  and  harbors,  railroads,  building, 
all  of  which  led  to  rapid  expansion  of  business,  accompanieil  by  wild 
speculation. 

The  panic  of  1873  can  scarcely  be  looked  upon  as  a  result  of  the 
war;  it  did  not  occur  until  eight  years  after  the  cessation  of  hostili- 
ties. It  was  not  the  result  of  the  ending  of  the  great  war,  ])ut  rather 
the  result  of  an  expansion  too  rapid  to  be  economically  sound  and 
of  an  unsound  financial  system. 
Retail  prices  and  wages. 

Retail  prices  show  a  more  gradual  decline  than  wholesale  prices, 
while  wages,  which  had  lagged  behind  retail  prices  during  the  war, 
rose  rather  rapidly  until  January,  1867,  when  there  was  a  slight 
break  and  the  rising  trend  was  resumed  until  the  panic  of  1873 
caused  widespread  unemployment.  In  spite  of  the  severe  nature  of 
the  panic,  th.ore  was  no  sharp  break  in  wholesale  or  retail  prices  or 
in  wages  at  that  time. 
The  Civil  War  reconstruction  period  as  a  precedent. 

The  similarity  in  the  behavior  of  prices  during  the  two  wars  is 
striking.  It  will  be  shown  in  Section  V  that  durhig  the  first  six 
months  of  the  present  readjustment  period  the  decline  that  has  taken 
place  in  prices  has  been  slight  in  comparison  with  what  took  place 
after  the  Civil  War,  and  also  that  it  has  taken  place  in  a  more  orderly 
manner. 

It  was  13  yeai-s  after  the  Civil  War  before  prices  returned  to  the 
prewar  level.  The  principal  cause  of  the  return  to  tlie  prewar 
level  was  the  fact  that  there  was  such  abundant  opportunity  for 
the  development  of  new  and  more  economical  methods  of  produc- 
tion in  the  shape  of  new  forms  of  machinery  and  new  kinds  of 
business  organization.  These  opportunities  do  not  seem  to  exist  for 
this  postwar  period  in  any  measure  comparable  with  tlie  previous 
period. 

There  seems  to  be  no  prospect  of  new  economic  factors  entering 
into  greatly  lessen  production  costs.  It  should  be  noted  on  Table 
15  that  by  January,  1871,  commodity  prices  had  readied  a  level 
33  per  cent  above  the  prewar  figure,  and  that  they  remained  practi- 
cally stationary  at  that  figure  through  the  year  1874.  Although  the 
period  1865-1871  was  marked  by  rather  sharp  price  fluctuations, 
the  same  result  would  have  been  reached  by  January,  1871,  had 
tliere  been  a  steady  decline  of  8  per  cent  per  year  through  those 
six  years. 


76  ECONOMICS   OF   THE   CONSTRUCTION   INDUSTRY. 

Building  materials  prices  during  the  two  wars. 

Building  materials  declined  in  price  along  with  other  commodities 
during  the  first  half  of  the  year  1865.  However,  the  fall  was  less 
than  in  the  case  of  other  commodities.  Whereas  connnoditics  in 
general  (hopped  27  per  cent,  huilding  materials  dropped  only  14^ 
per  cent.  The  recovery  during  tlie  second  lialf  of  the  year  was 
more  nnirked,  prices  of  huihhng  materials  retuniing  to  tlie  level  of 
the  last  quarter  of  the  year  1864,  and  remaining  at  that  level  for  a 
period  of  a  year  })efore  the  decline  set  in. 

The  index  figure  for  the  building  materials  group  remained  liigher 
than  that  for  all  commodities  up  to  and  including  the  year  1874. 
A  comparison  of  building  materials  prices  for  the  two  wars  is  shown 
graphically  in  Chait  IX. 
Prices  of  building  materials  after  the  Civil  War. 

Building  materials  declined  in  price  along  with  other  commodities 
durmg  the  first  haK  of  the  year  1865.  How^ever,  the  fall  was  less 
than  in  the  case  of  other  commodities. 

The  average  of  building  materials  prices  for  the  year  1865  is  14^ 
per  cent  less  than  for  1864,  while  for  all  commodities  the  fall  for 
the  same  period  is  27  per  cent.  The  recovery  durmg  the  last  half 
of  the  year  was  more  marked,  prices  on  this  class  of  commodities 
returning  to  the  level  of  the  last  quarter  of  the  year  1864  and 
remainhig  at  that  level  for  a  period  of  a  year  before  the  decline  set 
in.  The  index  figure  for  the  buildmg  materials  group  remains 
higher  than  that  for  the  all-commodities  group  up  to  and  includmg 
the  year  1874. 

In  January,  1871,  prices  of  buildmg  materials  had  reached  a 
level  41  per  cent  above  the  antebellum  figure.  This  result  would 
have  been  attained  had  there  been  a  steady  decline  of  5^  per  cent 
per  year  from  the  January,  1865,  level.  If  building  materials  had 
declined  from  the  liigh  point  of  January,  1865,  at  a  uniform  rate 
of  4  per  cent  per  year,  until  1874,  they  would  have  reached  the 
level  of  30  per  cent  above  the  prewar  figure;  which  is  the  actual 
level  attained  at  that  time,  when  buildmg  materials  and  commodities 
in  general  had  reached  the  same  level. 


ECOIsrOMICS    OF   THE    COXSTEUCTIOX    INDUSTRY. 


77 


Table  14. — Medians  of  relative  prices  of  commodities  at  icholesale  during  the  Civil  War 

and  the  World  War. 


All  commodities. 

Building  materials. 

Civil 
War. 

World 
War. 

Civil 
War. 

World 
War. 

Number  of  commodities 

92 

100 
100 
100 
100 

100 
96 
96 

97 

100 
100 
100 

111 

125 
137 
134 
135 

166 
169 
194 
200 

216 
190 
158 
175 

182 
173 
181 
173 

92 

100 
100 
100 
100 

100 
100 
100 
100 

100 
100 
102 
102 

114 
115 
119 
130 

142 
157 
169 
174 

178 
182 
187 
196 

a  187 
a  190 

19 

100 
100 
100 
100 

100 

100 

100 
100 

106 
112 
107 
116 

133 
143 
139 
145 

160 
177 
189 
200 

200 
196 
171 
200 

200 
200 
200 
199 

19 

1860  and  1913: 

100 

\pril              

100 

Julv       

100 

Oct ol  er    

100 

1861  and  1914: 

100 

100 

Julv    

100 

October        

100 

1862  and  1915: 

100 

April     

1(X) 

Julv       

100 

100 

1863  and  1916: 

104 

April   "           

109 

July                                                              

110 

117 

1864  and  1917: 

Januarj- 

124 
137 

Julv 

152 

1865  and  191s: 

April    

152 

161 

172 

Jii]  V 

181 

October  

186 

1866  and  1919:    - 

a  186 

April                                               

a  186 

July              

a  Estimated.    Series  discominued  after  December,  1918. 

Fiertiresfrom  Bulletin  of  the  War  Industries  Board. 

Relative  prices  for  Civil  War  based  on  average  for  1860=  100  per  cent. 

Relative  prices  for  World  War  based  on  average  for  1913=  100  per  cent. 


Table  15. 


-Medians  of  relative  prices  of  commodities  at  icholesale  in  the  period  follou'ing 
the  Civil  War. 


All  com- 

molities 

(92). 

Building 

materials 
(lOj. 

.Ml  com- 
modities 
(92). 

Bmlding 

materials. 
(19). 

18C7: 

169 
166 
150 
102 

158 
162 
154 
159 

159 
159 
158 
153 

117 

no 

132 
135 

175 
175 
158 
158 

150 
165 
175 
152 

152 
1.51 
150 
156 

149 
116 
144 
112 

1871: 

January 

133 
131 
130 
129 

133 
110 
130 
133 

135 
137 
1.30 
131 

130 
120 
130 

130 

141 

April 

142 

Julv      

Julv 

143 

October 

October 

144 

1868: 

1872: 

January 

150 

April. 

150 

Julv 

Julv 

145 

October 

150 

1869: 

1873: 

Januarv 

150 

April 

150 

Julv 

Julv 

152 

October 

150 

1870: 

1874: 

Januarv 

146 

April. ." 

Julv 

146 

Julv      

142 

October. 

October 

135 

<orD piled  by  T.  S.  Ilolden,  from 
Mitchell. 


•Cold,  Prices,  and  Wages  under  the  Greenlrc'-  Standard,"  by  W.  C. 


TS 


KCONOMK'S   or   THK    OOXSTRUCTION    INDUSTRY, 


ECONOMICS   or  THE   CONSTRUCTION'    INDUSTRY 


79 


|1664" 

1917 

1865  "'IS  18|  1866- 

1919  r  1 

;                                                        '. 

5    4    1 

§    - 

?  M  §  i  ^  ^ 

iio 

MEDIAN5  OF  R£LAT[VC  PRICES 

1 '  1  ■ '  1 

'  1 '  ■ 

OF 

BUILDING  MfflTRFALS 

300 

\ 

MADE    FROM  A  LI5T 

19  IDEMTICAL  COMMODITIES 

239 

'                                             DURING  T«t 

' 

CIVIL  WAR  -  PRLSENTlftRR 

---  civ'n_  WM3 

240 

I860  '"^ISlSl  1361  A"=19:4 1 1862  '""ISlSl  1865'"ol916 

1   1   S  S   1   ?   1   5  1    ^    §  §  1    1   5  § 

240 

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1 
1 

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200 

130 

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1  1 

180 

r 

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1 
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/ 

/ 

160 

140 

1^ 

leo 

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80 

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lit,  ,l.,i. . 

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!  1865 »-- 19161 1866- 

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Chart  fitnusht'd  t  lirougli  courtesy  of  Price  Section,  Wur  ludiistrics  iJoard. 
CHART  «X. 


80  ECONOMICS   OF   THE   CONSTRUCTION   INDUSTRY. 

SECTION  V.  COURSE  OF  COMMODITY  PRICES  DURING  THE  SIX  MONTHS 
FOLLOWING  THE  ARMISTICE. 

Basis  of  the  study  of  the  readjustment  period. 

A  study  has  been  made  of  the  course  of  commodity  prices  during 
the  six  months  following  the  armistice,  the  study  being  based  on 
the  quotations  of  wholesale  prices  of  313  commodities  which  are 
published  weekly  in  Dun's  Review.  Dun's  index  number  stood  at 
its  highest  level  on  October  1,  1918.  Since  this  number  is  based  on 
prices  for  the  previous  month,  it  is  thus  in  agreement  with  the 
Bureau  of  Labor  Statistics  figure  which  shows  the  high  level  for  the 
month  of  September. 

For  the  purpose  of  comparison  in  Table  16  the  index  figures  of 
the  London  Economist  have  been  placed  in  a  column  parallel  to  the 
figures  from  Dun's,  and  both  sets  of  figures  are  given  in  separate 
columns  reduced  to  the  1913  base.  Since  these  figures  on  the  1913 
base  have  been  computed  on  a  slightly  different  system  from  those 
shown  in  connection  with  Section  III  they  are  not  comparable  with 
those  figures. 
The  decline  in  the  price  level  in  the  United  States. 

Dun's  index  number  stood  at  its  highest  level  on  October  1,  1918. 
From  October  1,  1918,  to  March  1,  1919,  the  price  level  declined; 
after  March  1  it  took  an  upward  turn.  In  order  to  make  evident 
the  orderly  nature  of  the  price  adjustment,  it  is  considered  worth 
while  to  ])resent  some  figures  on  the  nature  and  number  of  com- 
modities advancing  and  dechning  from  week  to  week. 

At  first  weekly  quotations  showed  more  advances  than  declines, 
although  the  price  level  fell  by  a  small  amount.  From  November 
30,  1918,  until  March  22,  1919,  there  were  each  week  more  declines 
than  advances.  February  1  showed  59  declines  and  9  advances,  this 
being  the  smallest  number  of  advances  noted  during  that  period  and 
at  the  same  time  the  largest  number  of  decUnes.  The  month  of 
January  showed  the  greatest  decUne  in  the  price  level  of  any  month, 
about  4\  per  cent.  The  excess  in  number  of  commodities  shov»-ing 
declines  over  the  commodities  showing  advances  has  steadily  de- 
creased since  February  1,  until  on  March  22,  the  report  shows  26 
advances  and  26  declines.  March  29  figures  show  20  advances  and 
54  declines.  Of  these  54  commodities  showing  declines  21  were  on 
steel  products,  the  declines  announced  being  the  result  of  action  of 
the  steel  committee  in  conference  with  the  Industrial  Board  of  the 
Department  of  Commerce.  Previous  declines  in  steel  at  the  begin, 
ning  of  the  year  had  not  brought  the  prices  of  these  products  low 
enough  to  stimulate  business,  as  they  were  still  considerably  above 
the  general  price  level  of  other  commoilities.  Tlu'ough  the  month 
of  April  and  the  first  two  weeks  of  May  there  were  more  advances 
than  declines  each  week. 


ECONOMICS    OF   THE    COXSTRUCTTON    INDUSTRY.  81 

Thus,  it  is  seen  that  through  the  period  from  October  1,  1918,  to 
May  1,  1919,  commodity  prices  went  through  a  more  or  less  orderly 
process  of  readjustment.  Although  there  were  many  dechning 
prices,  at  the  same  time  there  were  others  advancing.  Of  greater 
importance  than  the  number  of  advances  and  dechnes  from  week  to 
week  are  fluctuations  of  the  index  figure.  On  March  1,  1919,  Dun's 
index  figure  showed  a  decline  of  6.9  per  cent  from  the  high  point  of 
October  1,  1918.  During  the  month  of  March,  in  spite  t)f  the  con- 
siderable declines  in  steel,  there  were  sufficient  advances  in  other 
commodities,  mainly  foodstuffs,  to  cause  a  slight  advance  in  the  price 
level.  The  index  for  April  1  shows  the  price  level  onl}^  5.7  per  cent 
below  the  high  point  of  October  1.  The  index  for  Maj^  1  shows  the 
price  level  4.7  per  cent  below  that  of  October  1,  the  continued  rise 
being  due  mainly  to  further  advances  in  foodstuffs.  By  July  1  the 
general  level  of  prices  had  passed  by  a  slight  margin  the  previous 
maximum  level  of  October  1,  1918. 

The  index  figures  of  the  Bureau  of  Labor  Statistics,  computed  ])y 
a  different  method  from  those  of  Dun's,  indicate  the  same  general 
trend  of  prices,  although  the  percentages  of  reductions  are  not  in 
exact  agreement  v/ith  those  indicated  by  Dun's.  The  Bureau  of 
Labor  Statistics  indices  (base,  average  for  the  year  1913,  100)  are 
as  follows:  September,  1918  (maximum),  207;  January,  1919,  203; 
February,  1919,  197;  March,  1919,  201;  April,  1919,  203;  May,  1919, 
207;  June,  1919,  207. 

Figures  for  the  numbers  of  commodities  declining  and  advancing 
from  week  to  week  are  shown  in  Table  17,  and  are  also  indicated 
graphically  on  Chart  X.  In  figure  1  of  the  chart  the  abscissae  of  the 
single-line  curve  represent  the  numbers  of  advancing  prices  noted 
from  week  to  week,  while  the  abscissae  of  the  triple-line  curve  repre- 
sent the  numbers  of  declining  prices  from  v/eek  to  week.  Figure  2 
indicates  the  change  in  Dun's  index  number  for  all  commodities  from 
month  to  month.  The  small  arrow  half-way  up  on  figure  2  indicates 
the  average  index  for  the  year  1913. 
Decline  of  the  price  level  in  England. 

Table  16  shows  the  London  Economist  index  figures  from  Sep- 
tember 1,  1918,  to  March  1,  1919.  The  September  1  figure  was  the 
highest  price  level  recorded  in  England.  The  reduction  in  the  price 
level  during  the  period  September  1,  1918,  to  March  1,  1919,  was 
7.5  per  cent.  This  figure  is  remarkably  close  to  the  percentage  of 
reduction  in  the  L^nited  States,  although  the  general  advance  in 
England  over  prewar  prices  has  been  somewhat  higher  than  in  this 
country. 

121297°— 19 6 


82 


ECONOMffiS   OF   THK   CONSTRUCTION    INDUSTRY. 


THE  FALL  OF  THE  PRICE  LEVEL 
DURING  THE  PERIOD  OF 
READJUSTMENT 

Fl  G.  1    -  Number  of  Declines  and  Advances  in  Weekly  Quofafions 
FIG.  2  "Dun's  Index  Number  for  313  Commodities 

U.S.  DEPARTMENT  OF  LABOR 

INFORMATION  ANO  EDUCATION  SERVICE 

DIVISION   OF  PUBLIC   WORKS  ANO    CONSTRUCTION   DEVELOPMENT 


CHART  X 


ECONOMICS   OF   THE   CONSTEUGTIOX    IXDUSTKY,  83 

Comparison  of  March,  1919,  prices  with  March,  1918,  prices. 

Of  313  commodities  quoted  iii  Duq's  Review  of  March  8,  1919, 
140  were  quoted  at  prices  lower  than  they  were  a  year  previous, 
and  126  were  quoted  liigher  than  they  were  the  year  previous.  The 
index  figures  indicate  a  reduction  in  the  price  level  from  March  1 , 
1918,  to  March  1,  1019,  of  4.8  per  cent.  The  commodities  which  were 
quoted  at  prices  lower  than  the  prices  of  the  previous  year  consisted 
of  certain  foodstuffs,  drugs  and  chemicals,  wool,  woolen  and  cotton 
textiles,  metals,  and  oils.  With  the  exception  of  steel  products,  no 
building  materials  were  quoted  at  prices  lower  than  in  March,  1918.  Of 
the  commodities  wliich  were  higher  in  price  than  they  were  at  the  same 
time  in  1918,  the  principal  ones  were  certain  foodstuffs,  lumber  aad 
other  building  materials,  drugs  and  chemicals,  hides,  naval  stores, 
oils,  paints,  and  tobacco. 

According  to  the  figures  of  the  London  Economist  the  British  price 
level  was  only  0.5  per  cent  lower  on  March  1,  1919,  than  on  March  1, 
1918. 
Exceptional  commodities. 

An  examination  of  the  price  records  of  the  Bureau  of  Labor 
Statistics  shows  only  two  commodities,  in  the  hst  of  nearly  300,  that 
were  lower  in  price  in  1918  than  they  were  in  1913.  These  two  com- 
modities are  onions  and  coffee  (Rio  No.  7).  Both  of  these  commodi- 
ties increased  in  prices  after  the  armistice  and  have  been  quoted  about 
50  per  cent  above  the  prewar  price. 

Of  the  commodities  that  have  been  included  in  the  study  of  the 
price  level,  the  most  marked  declines  since  the  armistice  occurred 
in  the  case  of  lake  copper  and  pig  lead.  In  November,  copper  was 
69  per  cent  above  the  prewar  price.  After  that  time,  it  dropped 
practically  to  the  prewar  level.  Pig  lead  in  November  was  79  per 
cent  above  the  prewar  price,  and  on  April  12  it  was  only  11  per  cent 
above  it. 

The  exceptional  behavior  of  these  prices  is  to  be  explained  by 
exceptional  circumstances.  The  average  production  of  coj^per 
in  the  United  States  in  the  years  1912  to  1916  was  1,722,000,000 
pounds;  the  average  consumption  was  932,000,000  pounds;  the 
remainder  of  the  product  being  exported  to  foreign  countries.  The 
1918  production  of  copper  in  the  United  States  was  2,450,000,000 
pounds.  The  cessation  of  the  war  left  the  copper  interests  in  a 
serious  situation.  Figures  of  the  United  States  Bureau  of  Mines 
indicate  that  on  January  1,  1919,  stocks  of  copper  in  this  country 
in  excess  of  normal  aggregated  some  600,000,000  pounds. 

Li  spite  of  price  reductions,  little  export  demand  dovelop<^d  during 
the  first  half  of  1919,  nor  was  there  any  considerable  domestic 
demand.  The  drastic  reductions  did  not  sthniUate  business,  and  it 
has  been  stated  that  the  low  prices  quoted  were  under  the  cost  of  pro- 


84  E(;ONOMICS   OF   THE   CONSTRUCTION   INDUSTRY. 

<] action.  One  feature  of  the-  copper  situation  is  the  fact  that  copper 
can  bo  used  over  again  more  readily  than  any  other  metal,  and  conse- 
(puuitl}^  copper  already  worked  into  war  materials  can  be  used  again. 
This  is  not  true  to  any  considcrabhi  extent  in  the  case  of  iron  and  steel; 
hence  the  markets  have  not  been  overstocked  in  this  commodity  to 
the  extent  that  they  were  in  the  case  of  copper. 

The  copper  industry  seems  to  have  been  more  seriously  disturbed 
during  the  period  of  readjustment  than  most  others.  The  United 
States  Government  did  not  make  an  early  disposition  of  its  holdings 
of  copper.  It  agreed  to  dispose  of  them  through  the  deah^rs  so  that 
the  placing  of  its  stocks  on  the  market  would  not  tend  to  further 
disturb  the  market  situation. 

The  case  of  load  is  somewhat  different  from  tliat  of  copper.  This 
was  not  m  such  great  demand  during  the  war  as  the  other  metals, 
and  was  not  controlled  by  the  Goverrmient  as  the  other  metals  were; 
however,  at  the  beginning  of  the  year,  there  were  large  stocks  of  pig 
lead  on  hand.  At  the  time  of  the  signing  of  the  ai-mistice  the  Govern- 
ment was  purchasing  about  25,000  pounds  monthly.  This  demand 
was  eliminated  from  the  situation  Avith  the  cessation  of  war  activities. 

The  American  Smelting  &  Refining  Co,  controls  about  half  the 
product  of  this  country,  and  it  practically  fixes  the  market  prices. 
It  would  appear  that  this  company  reduced  the  price  in  order  to 
stimulate  business.  It  also  appears  that  the  desired  result  was  not 
speedily  attained,  as  no  business  developed  for  some  time  after  the 
reductions  were  announced.  One  of  the  independent  mining  com- 
panies which  produces  about  5  per  cent  of  the  total  output  in  this 
country  shut  down  its  mines  early  in  1919,  stating  that  it  could  not 
afford  to  produce  at  the  prices  then  current.  It  is  to  be  noted  that 
after  that  time  the  price  of  lead  reacted  upward. 
ReducticKS  in  steel,  March  20,  1919. 

In  Section  II  it  was  shown  that  the  reductions  in  steel  brought  the 
average  for  finished  steel  products  down  to  a  figm'e  95  per  cent  above 
the  prewar  level.  Since  tliis  average  was  obtained  by  a  system  of 
weighting  similar  to  that  used  by  the  Bm'eau  of  Labor  Statistics, 
it  is  comparable  with  the  figures  of  that  bureau.  The  bureau  index 
nmn])er  for  wholesale  prices  of  all  commodities  for  the  month  of 
February,  1919,  was  197  and  for  March,  1919,  200.  It  is  thus  seen  that 
the  action  of  the  conference  on  steel  prices  had  the  effect  of  bringing 
these  products  doAvn  very  close  to  the  general  level  of  all  commodities. 

The  new  price  level. 

Examination  of  actual  figures  shows  that  the  price  level  has 
declined  only  a  ver}?^  fittle,  and  for  the  most  part  the  declines 
have  taken  place  in  a  gradual,  orderly  manner. 

In  general,  the  course  of  prices  since  the  armistice  seems  to  bear  out 
the  theoiy  that  a  new  price  level  has  been  estabhshed. 


ECONOMICS    OF   THE    COI<rSTKUCTION    INDUSTRY. 


85 


Table  16. — Covrr.c  of  commodity  prices  during  the  1919  readjustment  period. 
[Base:  Average  of  figures  for  the  year  1913.] 


Period 


Sept.  1 
Oct.  1, 
Nov.  1, 
Dee.  1, 
Jan.  1, 
Feb.l, 
Mar.  1, 
Apr.  1, 
May  1, 
June  1, 
Juiy  1, 


,  1918. 
1918.. 
1918. 
1918.. 
1919. . 
1919., 
1919. 
1919., 
r,U9.. 
1919. 
1919.. 


Mar.  1,1918. 


Fall,  Mar.  1, 1018,  to  Mar.  1, 1919. 
Fall,  Sopt.  1, 1918,  to  Mar.  1, 1919. 
Fall,  Oct.  1,  1918,  to  Apr.  1,  1919.. 
Fall,  Oct.  1,  1918,  to  May  1, 1919.. 


United  States. 

Orcat  Britain. 

Dun's 

Reduced 

London 

Reduced 

index 

to  1913 

Economist 

to  1913 

figure. 

base. 

index. 

base. 

a  0  '>67 

231 

231 

"  233. 227 

193 

6,2:58 

230. 529 

191 

6,210 

230 

230. 375 

191 

6,212 

230 

230. 146 

190 

6,094 

22.5 

220. OoO 

183 

5,8.51 

216 

217.037 

179 

5, 796 

214 

219. 973 

182 

5,723 

211 

222. 193 

184 

5,774 

213 

227,973 

ISS 

5,988 

221 

233,707 

194 

227. 977 

1S8 

5,828  1          215.5 

Per  cent. 

Per  cent. 

4.8 

0.5 

7.5 

5.7 

4.' 

a  Highest  figure  reached. 

Table  17. — Number  of  declines  and  advances  in  tveeUij  quotations  during  the  period  of 

readjustment. 


Number  of 
advances. 

Numbor  of 
declines. 

Numbor  of 
advances 

over 
declines. 

Number  of 
declines 

over 
advances. 

191 N. 

Oct.      5 

37 
21 
29 
22 
27 
18 
24 
27 
IS 
23 
16 
10 
11 

15 
16 
18 
14 
9 
15 
16 
16 
26 
22 
2t 
28 
20 
34 
42 
32 
28' 
43 
33 
ui 
73 
40 
58 
38 
41 
41 

21 
25 
23 
22 
24 
19 
21 
24 
20 
32 
31 

;i9 

31 

29 
32 
53 
55 
59 
45 
44 
46 
36 
42 
35 
26 
54 
29 
40 
29 
19 
26 
20 
25 
17 
2 
24 
31 
15 
19 

16 

Oct.    12 

4 

Oct.    19 

6 

Oct .    2 G 

Nov.    2 

3 

Nov.    9 

1 

Nov.  16 

3 
3 

Nov.  23 

Nov.  30 

2 
9 
15 

29 
20 

14 
16 
35 
41 
50 
30 
28 
30 
10 
20 
11 

Dec.     7 

Dec.   14 

Dec.  21 

Dee.  28 

1910. 
Jan.      4 

.Tan.    11 

Jan.    IS 

Jan.    25 

Fob.     1 

Feb.     8 

Feb.    15 

Feb.   22 

Mar.     1 

Mar.     8 

Mar.  15 

Mar.  22 

Mar.  29 

34 

Apr.     5 

5 

2 

3 

9 

17 

13 

33 

56 

38 

34 

7 

25 

22 

Apr.    12 

Apr.    19 



A  pr.  20 

May     3     ... 

May  10 

May  17 

May  2) 

May  31 

June    7 

June  14 

June  21 

Juji-i  28 

80  FXJONOMICS   OF   TlUi.   CONSTRUCTION    INDUSTKY. 

SECTION  VI.  INCREASE  IN  CONSTRUCTION   COSTS. 

Introduction. 

Datii  sufficient  to  estimato  the  average  increase  of  constructiou 
costs  all  over  the  country  would  be  an  exticMH^y  valuable  addition 
to  this  report.  In  the  brief  time  permitted  for  this  investigation 
it  has  not  been  possible  to  secure  sufficient  data  to  be  representative 
of  ail  types  of  construction  in  all  parts  of  the  country.  However, 
jRgures  have  been  secured  for  various  types  of  buildings  located  in 
various  parts  of  the  country.  Tliese  figures  are  believed  to  be  fairly 
representative  of  tlie  present  cost  situation  as  compared  with  tbat 
of  previous  years. 

Comparative  costs  of  typical  wood-frame  dwellings,  1915  and  1919. 

The  experts  of  the  United  States  Housing  Corporation  were  asked 
to  furnish  an  estimate  on  a  tyi^ical  wood-frame  building.  They  pre- 
pared an  estimate  on  a  12-room  2-family  wood-frame-and-stucco 
house,  based  on  material  and  labor  costs  prevailing  in  the  neighbor- 
hood of  New  Y.ork  during  the  first  quarter  of  1019.  A  comparative 
estimate  of  the  cost  of  the  same  house  in  the  year  of  1915  was  made 
in  the  office  of  the  Division  of  Public  Works  and  Construction  Devel- 
opment. These  figures  show  an  increase  of  48.4  per  cent  m  the  cost 
of  constimction  of  this  buildmg.  i^  itemized  summary  of  this  com- 
parative estimate  is  given  m  Table  18. 

Comparative    construction    costs,    1911-1918,    of    reinforced-concrete 
hospital  buildings. 

An  architect  m  St.  Paul,  Minn.,  has  furnished  figures  on  the  cost 
per  cubic  foot  of  a  number  of  buildings  actually  constructed  in  dift'er- 
ent  3'ears.  One  was  a  hotel  and  the  rest  hospital  buildings,  but  all 
were  of  substantially  the  same  construction.  The  type  of  constnic- 
tion  was  reinforced  concrete.  All  were  designed  by  the  same  arcliitecfe 
and  built  by  the  same  contractor.     Tlie  figures  are  given  below: 

Cost  of  rein/ormd-concrete  buildinfis  in  St.  Paul.  Mhni.. 


Year. 

Cost  per 
cubic  foot. 

Relative 
cast. 

VlMI. 

1 
Cost  per     Relative 
cubic  foot.       cost. 

l!»)l 

$0.21 
.22 
.24 
.25 

Per  cent. 
81 
88 
96 
100 

1916 

1917 

1918 

so.rio 

1              .39 

.45 

Per  cart. 
129 

1012 

1914 

1915 

VA 

180 

These  figures  show  that  the  1918  builduig  cost  80  per  cent  more 
than  the  1915  building.  The  1918  building  coidd  probably  be  dupli- 
cated for  a  somewhat  lower  figure  in  Ai)ril,  1919,  owing  to  reductions 
in  prices  of  some  materials  and  probable  increased  efficiency  of  labor. 


ECONOMICS   OF   THE   COISTSTRUCTIOX    INDUSTRY. 


a? 


Comparative  costs  of  typical  steel-frame  office  buildings,  1915  and  1919. 

Oil  Februarj^  20,  1919,  the  Engineering  News-Record  published 
fin  estimate  of  the  increase  of  the  cost  of  construction  of  a  typical 
steel-frame  office  buildhig  in  the  city  of  Chicago  as  between  Feb- 
ruary, 1919,  and  the  year  1915.  The  comparative  estimate  was 
based  on  an  actual  building  erected  in  1915,  the  1919  figures  being 
estimated.  Since  these  figures  appear  to  be  substantially,  correct, 
the  comparative  estimate  is  given  in  Table  19. 

This  estimate  indicates  an  increase  of  87  per  cent  on  this  type  of 
building.  Since  these  figures  were  published,  reductions  in  some  of 
the  materials  have  taken  place,  and  the  increase  over  1915  for  the 
month  of  April,  1919',  would  probably  he  just  a  little  more  than  80 
per  cent. 

Other  figures  on  construction  costs. 

Otlier  figures  on  increase  of  costs  of  buildings  have  been  furnished 
by  various  New  York  architects  and  contractors.  Some  of  these 
figures  are  based  on  actual  building  construction  and  some  on  c*»n- 
tractors'  estimates.     These  figures  are  shown  in  Table  20. 

Average  increase  of  cost  of  construction. 

On  the  basis  of  the  figures  at  hand,  and  taking  into  consideration 
the  relative  importance  of  each  type  of  construction  represented 
with  reference  to  the  whole  volume  of  building  construction,  indices 
representing  average  construction  costs  have  been  computed  on  the 
basis  of  the  figures  at  hand.  In  these  computations  the  relati^-e 
importance  of  each  type  of  construction  represented  with  reference 
to  the  total  volume  of  building  construction  has  been  consideretl. 
Tliese  figures  are  assumed  to  be  only  approximately  e(»rreet.  They 
are  given  below : 


Year. 

Tu(h'>:. 

Year. 

Index. 

1911              

100 
100 
117 

1917          ... 

Vi'.i 

I'M.'t 

1918 

IS'* 

1016        

1919  a 

16"' 

a  Fir.st  four  month.;. 


Figures  on  the  cost  of  road  construction. 

Some  comparative  figures  on  costs  of  road  construction  have  been 
obtained  from  the  Bureau  of  Public  Roads.  The  prices  given  under 
tiio  caption  of  1914  were  obtained  from  annual  reports  of  the  various 
highway  departments,  and  the  prices  under  the  caption  (»f  1918  arc 
the  average  on  the  prices  used  in  the  estimates  for  the  various  Federal 


S8 


K('ONOMTC.S   OF   TTFE    CONSTRUCTION    INDUSTRY. 


iiid  projects  submlKcd  1)\-  llin  rcsix'ctivc  States.     Tlic  comparjitivo 
liiXuros  are  given  below: 


1014 

191« 

Increa.sc. 

MASSACHrSKTTS 

Kxcavatlon: 

Karth 

cu.  vd.. 

80.  50 
2.00 

11.00 

$0.  92 
4.  50 
10.  (10 

Ptr  cent. 
SI 

Konk 

do.... 

125 

Concrete  structures 

do.... 

cu.  vd. . 

45.5 

OP.EGON. 

Kxcavntlon: 

Eart  h '. 

13.  .50 

.28 

.77 

1.5.00 

21.42 

.55 

1.  50 

2.5.  00 

58.6 
96.5 

Rock 

do.... 

9.5.0 

Concrete  .structures 

do.... 

: cu.  vd.. 

do.... 

do.... 

66.6 

■\VIPCONSIN. 

Kxcavation,  earth 

Concrete  si rnctiires 

Water-boniul  macadam 

10.05 

.58 

11.29 

2.1.3 

1.  15 

27.05 

.70 
10.  00 
4.20 
1.  .",0 

68.5 

20.7 
42.0 
97.5 

Gravel  surfacing 

do.... 

cu.  vd.. 

do.... 

do 

3.5 

AI,A15AM  A. 

Excavation,  earth 

Sand  ciay 

1.-,.  45 

.25 

'J.  00 
.30 

22. 40 

.35 

16. 50 

.50 

45.0 

40.0 
83.4 
66.6 

NEW    YORK. 

Kxcavation: 

Karth 

9.55 

.50 
1.25 

7.00 
3.  .50 

17.35 

.80 
1..50 
8.  50 
5.25 

81.6 
60.0 

Rock 

....  do 

20.0 

Concrete  struct  nro.s 

Waier-bound  macadam 

do.... 

do.... 

21.2 
50.0 

12.25 

lo.  C5 

31.0 

The  average  of  these  mereases  is  57  per  cent.  The  figures  indicate 
a  rather  wide  discrepancy  as  between  the  different  localities.  The 
average  is  given  as  an  approximate  indication  of  the  general  increase 
in  cost  of  this  type  of  construction. 

On  April  11,  1919,  the  Railroad  Administration  announced  a 
reduction  of  10  cents  per  ton  in  the  freight  rates  on  sand,  gravel, 
and  crushed  stone  when  consigned  to  States,  counties,  and  munici- 
palities. The  order  provided  for  a  minimum  of  40  cents  per  net 
ton,  except  in  cases  where  the  regular  commercial  rates  were  lower 
than  that  amount,  in  which  instance  the  regular  rates  still  held.  As 
a  consequence  of  this  reduction,  the  cost  of  public  roads  would  be 
reduced  somewhat  from  the  figures  given  above. 


ECONOMICS    OF   THE    COXSTRUCTIOX    INDUSTRY, 


89 


Table  IS. — Summary  of  estimate  on   tivclve-room.    two-family  house  prices.  Neir  York 

market,  1915-1919. 


E>ca^ation 

Masonry 

Interior  plaster 

;^xterior  plaster 

Kouffh  carpentry . . . 
Finished  flooring . . . 

Screens 

MJllwork  (exterior) . 
Malhvork  (interior) . 

Roofing 

Painting 

Plumbing 

Hot-air  heating 

Electric  work 

Finish  hardware 

Kough  hardware . . . 


Total 

Per  cent  oi  increase  1919  over  1915. 


191.5 


199.23 

573. 37 

365.  80 

284.77 

1,199.50 

170. 67 

37.90 

241.25 

331.96 

120.  57 

138.  88 

311.  S4 

373.  94 

80.45 

45.  70 

42.80 


4,518.C3 


1919 


293. 97 

847.09 

549. 47 

458.  05 

1,704.54 

224.  IS 

48. 00 

386. 08 

544. 50 

198.  96 

243.  05 

410.00 

528.  00 

118.00 

80.00 

75.00 


6,  708. 89 


Ratio. 


1.48 
1.48 
1.50 
1.60 
1.42 
1.31 
1.27 
1.60 
1.64 
1.65 
1.75 
1.35 
1.41 
1.47 
1.75 
1.75 


1915 

1919 

Amount. 

Per  cent 
of  total. 

Amount. 

Per  cent 
of  total. 

81,980.27 
2,  .538. 36 

43 

57 

S2,710.68 
3,998.21 

41 

Materials 

Total 

4,518.63 

100 

6, 708. 89 

IOC 

Table  19. — Summary  of  estimate  on  steel-frame  office  building .o^ 
(Prices:  Chicago  market,  1915-1919  (February  ] 


Actual 
1915  costs. 


Ratio. 


E.stimated 
1919  costs. 


Alasonry 

Steel,  material 

Steel ,  erection 

Foundations 

Elevators 

Carpentry 

Ornamental  iron  vvork 

Heating  and  ventilating 

Fireproofing 

Engines  and  generators 

Plumbing,  drainage 

Elccirie  wiring 

Terra  cotta 

Various  minor  items,  e.  g.,  glazing,  hardware,  roofing,  painting,  light- 
ing, etc 

Architects'  and  engineers'  fees 


S175,400 
100.700 
20,100 
81,100 
74,000 
73,800 
62,600 
62,100 
47,000 
41,000 
30,s00 
29,  .500 
26,500 

129, 200 
46,200 


1.52 
3. 15 
1.29  ' 
1.54  ! 
2.00  I 
1.86  ' 
2.20 
1.92 
1.70 
2.00 
1..54 
2.00 
1.70 

1,50 


8266,608 

317,205 

2.5,929 

124, 894 

148,000 

137, 268 

137, 720 

119,232 

79,900 

82,000 

47,432 

59,000 

45,050 

193,. 800 
89, 201 


Total 1, 000, 000 


1,873,239 


a  From  the  Engineering  News  Record. 


90 


ECONOMICS   OF   THK   CONSTRUCTIOIT   INDUSTRY. 

Tabli:  2'). — C'ompnrdi'iye  crifitu  of  rnrinus  I'/pefi  of  bvilfimf/s. 
[Figures I roiM  various  architects  and  contraictors.J 
NoXFIRKPROOF  nUILniNOS. 


Kind  of  building 

Location. 

Ty-pe  of  construct  ion. 

Dates  of 

com(>ari- 

son. 

1 

Increase 
in  cust. 

Store 

Bethleliem,  Pa 

Lumlxir  and  brick 

Stone,  brick,  lumber 

Luml)er  und  plaster 

Stone  and  liunlH'r 

Brick  and  hnnfjer 

Stone,  brick,  lumber 

Brick  and  lumljer 

Stone, concrete,  iumlwr. .. 

Brick,  stone,  lumber 

Lumber  and  plaster 

..:  1900-1919 
..    1915-1919 
..    1915-1919 
..    1917-1919 
..'  1917-1919 
..    1917-1919 
..,  1917-1919 
..    1918-1919 
..1  1918-1919 
..    1918-1919 

Per  cent. 
96 

Kesidences 

Do 

Baltimore  Md   

G4 

Staten  Island,  N.  Y 

a 

Do 

Philadelphia  Pa            

H 

Do              

do : 

59 

Do 

...do         

35 

Do 

Do 

New  York  City  (alterations) 
Monclair ,  N .  J 

39 

is 

Do 

29 

Do 

Wilmington,  Del 

25 

FIREPROOF  BUILDINGS. 


Fiictories. 


Do 

Do 

Do 

Hospital 

OiTice  building. 


Brooklyn,  N.  Y 


Newark,  N.  J , 

Long  Island  City,  K.  Y . 

New  V'ork  City 

St.  I'auJ,  Miim 

Cliicago,!!! 


Reinforced  concrete,  brick 
outer  walls, sa^rtooth  roof. 

do 

do 

do 

Reinforcetl  concrete 

Steel  frame 


1915-1919 

1915-1919 
1918-1919 
1918-1919 
1915-1919 
1915-1919 


32 

8*1 
87 


Vn.  LUMBER. 

Importance  of  the  lumber  industry. 

The  size  and  imj)ortciiice  of  the  lumber  industry  and  its  relation  t-o 
building  malces  the  studj'  of  the  conditions  surrounding  the  produc- 
tion and  marketing  of  this  product  of  pi*ime  importance  m  any  survey 
of  prices  of  building  materials.  The  somewhat  limited  scope  of  the 
present  study  makes  it  possible  to  present  here  only  a  limited  sMrxQj 
of  the  industry  as  affected  by  the  war. 

Lumbering  comes  next  to  agriculture  in  im|)ortaiice  among  the 
basic  industi'ies  of  the  United  States.  It  ranks  third  among  manu- 
factures m  the  value  of  its  products,  according  to  the  census  of  lOCMl, 
dropping  behind  the  meat-inicking  and  metal  industries  only.  It  em- 
ploys api)roximately  10  i>er  cent  of  all  the  wage  earners  in  manu- 
facturing industries.  The  annual  sales  of  this  product  aggregate  one 
and  one-half  biUion  dollai"s  ])er  year  and  the  industry  has  a  combined 
investment  of  approximately  two  and  one-half  bilhons. 

The  amount  of  lumber  entering,  as  raw  material,  into  different 
forms  of  consti'uction  work  differs  widely.  In  the  average  frame 
house  this  item  forms  a  jiredominant  ]>art,  and  in  factor}-  building  or 
ajnirtment  construction  it  becomes  a  factor  in  building  cost,  as  it 
is  used  for  scaffolding,  forms  for  conci-ete  work,  interior  tiim,  special 
finish,  wood  block  tlooring,  and  in  many  auxiliary  ways.  In  spite 
of  the  great  development  of  various  forms  of  fireproof  construction 


ECONOMICS   OF   THE    CONSTRUCTIOZs'    INDUSTRY, 


91 


within  tlie  past  few  years,  lumber  remains  by  far  the  most  important 
group  of  building  materials  in  the  extent  of  its  use  and  the  value  of 
the  product. 

Stands  of  softwoods,  by  regions  and  species. 

For  the  purpose  of  studying  the  relationship  between  the  lumber 
industry  and  building,  we  may  consider  chiefly  the  use  of  softwoods, 
as  these  comprise  00  per  cent  of  the  lumber  used  in  coiisti-uction  work. 

The  principal  soft^voods  and  their  regional  distribution  hnve  been 
estimated  as  follows: 

Table  of  standino  tiroberA 


Re°:io!i. 


Species. 


Pacific  Northwest . 


Southern  States . 


California. 


Inland  r.mpirn. 


Douglas  fir 

Western  pine  . 

Sl>ruoe 

Cedar 

Miscellaneous. 


Feet  in 
billionj. 


688.47 

92.  IH 

12.01 

01. '.K) 

14*.  26 


ShorHeaf  pine. 
Lon^loal  pine. 

Cypress 

Hemlock 

Red  cedar 

\S'!ute  pine  . . . 

Spruce 

Miscellaneous. 

Douglas  fir 

Western  pine  . 

P.--d\vood 

Ileuilock 

Miscellaneous . 


1.52. 11 

160.  ,52 

2.3. 0.5 

6.02 

1.00 

l.'jO 

2.4^) 

.b2 

30. 00 

121.65 

73.  -X) 

.13 

65. 96 


Douglas  fir 

Western  pine  . 
Miscellaneous . 


Lake  •Statej 


Hemlock 

White  }>ine  . . . 

Spruc-e 

Mistellaneous. 


Northeastern  States. 


Aliotiie 


Total  stand. 


Wiiite  pine  . . . 

f^|)nice 

Ileinlo'k 

Noiuay  pine  . 
Miscellaneous . 


Douglas  fir.. 

Hemlock 

nard\v(x>d . . 


31.33 
32.  .58 
11 4.  .52 


22.30 
16.03 
4.46 

8.68 


10. 63 

1.5.64 
2.<i0 

.-50 
3.iX» 

2.60 

39;  1.5 


Total. 


1,002.52 


347.92 


'298.24 


181.43 


32.37 


47. 52 


1,961.47 


o  From  Forest  Service.  I'.  S.  I)epartment  of  Agriculture. 


The  stand  of  timber  by  s]>ecies  is  as  follows: 


Fci't  in 
liillions. 

Douglas  fir 762.  00 

Miscellaneous  wood 341.  04 

Yellow  pine 312.  03 

Western  pine 24fi.  41 

Redwood 73.  90 

^edar G2.  GO 

Hardwood 39.  15 


Hemlock 

Spruce 

White  Pine.. 

Cypress 

Norwav  Pine 


Fivi!  in 
liiHKwi.^. 

My  82 

:v,.  11 

28.  26 

23.05 

.50 


Total  stand 1,%I.  17 


1)2  KCONOMICS    or   THE    ('ONSTRUC 'TION    INDUSTRY. 

Douglas  fir  is  the  species  having  the  greatest  stand,  approximately 
three-quarters  of  a  trillioji  feet.  This  is  measured  according  to  exist- 
ing standards  of  cutting,  which  does  not  include  a  complete  utilization 
of  all  waste  products. 

The  miscellaneous  group  imdoubtedly  includes  many  species  that 
might  bo  included  imder  the  other  headings;  but  they  are  located  in 
patches  so  separated  from  any  large  holdings  and  in  such  small  stands 
that  no  attempt  could  be  made  to  show  definite  segregation  of  the 
various  species. 

Southern  yellow  pine  has  a  stand  of  somewhat  over  300  billion 
feet.  At  the  present  rate  of  cutting  and  regrowth  it  is  estimated 
that  this  stand  will  not  be  exhausted  for  20  years  to  come.  The 
gradual  diminution  in  size  of  holdings,  preventing  large-scale  oper- 
ations, however,  causes  the  actual  cutting  to  become  less  economi- 
cal. Consequently,  it  is  extremely  doubtful  wliether  yellow  pijie  can 
be  cut  for  so  long  a  time  under  existing  conditions  with  a  profit  to 
the  producer. 

At  present  the  Southern  pine  industry  has  approximately  19,000 
mills  producing  about  18  billion  feet  annually.  Many  of  these  mills 
are  small  portable  mills  put  in  by  the  farmers  or  by  small  operators 
to  assist  in  clearing  the  land  for  agricultural  purposes.  The  lumber 
product  is  of  secondary'  importance,  as  there  is  necessarily  a  large 
waste.  Contrasted  with  this  large  number  of  mills  are  the  nine 
hundred  and  odd  mills  of  the  Pacific  Northwest,  producing  annually 
about  5  billion  feet.  In  other  words,  the  Pacific  Northwest  has  one- 
eighteenth  the  number  of  mills  of  the  Southern  Pine  region  and  it 
jiroducos  one-third  the  amount  of  lumber  the  Southern  pine  region 
produces. 

It  would  appear,  therefore,  from  the  study  of  the  distribution  of 
standing  timber  that  the  coimtry  must  gradually  turn  to  the  North- 
west, just  as  in  the  past  it  has  turned  from  the  Northeast  to  the  Lake 
States  and  from  the  Lake  States  to  the  South.  As  an  illustration  of 
the  shifthig  of  the  main  source  of  lumber  supply,  it  may  be  mteresting 
to  note  that  in  1850  the  New  England  States  produced  54  per  cent  of 
our  total  supply  of  lumber.  In  1914  they  produced  9  per  c«nt.  In 
1870  the  Pacific  States  produced  3.1  per  cent;  in  1914  they  produced 
19.3  per  cent;  and  to-day  approximately  25  per  cent.  In  1860  the 
Southern  States  produced  16.5  per  cent.  To-day  they  produce  47.9 
per  cent.  Tliis  sliifting  of  the  source  of  supply  has  involved  various 
problems  of  increasing  cost  of  transportation,  utilization  of  cut-over 
lands,  aridity,  and  waste. 

Annual  production  of  lumber. 

The  amounts  of  lumber  cut  in  the  United  States  for  certain  years, 
as  computed  by  the  Forest  Service  of  the  Ljiited  States  Department 
of  Agricidtiire,  are  given  in  the  following  table: 


ECONOMICS    OF   THE    CONSTRUCTIOX    IXDUSTRY.  93 

Production  of  lumber  in  the  United  States. 


Calendar  year. 

Millions  of 
feet. 

Calendar  year.                         -^"/^"^  of 

1S90 

23,49-1.9 
34,780.5 
42,000.0 
38,387.0 

1915 

37,011.7 

1900 

1916.                

39  807. 2 

1908 

1917 

3(1.000.0 

1913 

191S 

0  32,400.0 

1914 

37, 346. 0 

a  Estimated. 

The  ma^cimum  production  of  lumber  was  reached  in  the  year  1908. 
The  gradual  increase  in  production  up  to  that  year  had  been  encour- 
aged by  the  promise  of  fairly  high  profits  that  was  held  out  by  the 
prices  that  prevailed  from  1895  to  1908.  In  1908  conditions  of  over- 
production began  to  be  apparent  and  competition  between  the  West 
and  the  South  for  the  markets  of  the  Middle  West  had  the  effect  of 
lov.'ering  prices.  Tlie  consequent  lessening  of  profits  tended  to 
decrease  production. 

After  1908  production  decreased  somewhat  each  year,  with  the 
exception  of  the  year  1916,  when  it  showed  a  fair  increase  over  the 
yeai-s  immediately  preceding.  The  slump  in  the  years  1917  and  1918, 
however,  was  marked.  The  decrease  after  1908  may  be  partially 
accounted  for  tiirough  readily  available  timber  becoming  less  and 
less  accessible.  It  became  increasingly  necessary  to  build  roads  and 
to  extend  railroad  facilities  to  bring  the  raw  material  to  the  miEs. 

The  capacity  production  of  the  country  has  been  variously  esti- 
mated at  65  to  75  billion  feet  per  annum.  If  these  figures  be  accurate, 
the  output  has  never  approached  the  full  capacity  of  the  mills. 

From  the  production  table  it  is  seen  that  the  timber  cut  in  1917 
was  10  per  cent  less  than  the  output  of  1916,  and  that  a  further  reduc- 
tion of  10  per  cent  in  output  was  experienced  in  1918.  The  1918  pro- 
duction figure,  as  estimated,  is  14  per  cent  under  the  average  for  the 
preceding  five  years.  The  1918  production  is  seen  to  have  been  about 
half  the  total  capacity  of  the  industry. 

In  a  statement  made  before  the  Industi-ial  Board  of  the  Department 
of  Commerce  on  March  22,  1918,  Mr.  John  H.  Kirby,  president  of  the 
National  Lumber  Manufacturer'  Association,  stated  that  the  war- 
time prices  fixed  by  the  Government  on  lumljer  were  such  as  to 
stimulate  only  a  small  proportion  of  the  productive  capacity  of  the 
industi'v. 

Ml.  Kirby  further  stated  that  the  existing  capacity  of  the  sawmills 
in  the  United  States  v:as,  at  the  beginning  of  the  war,  far  in  excess  of 
the  quantity  considered  necessary  for  the  efficient  maintenance  of  the 
nation's  war  program;  that,  on  accoimt  of  the  restriction  of  general 
building  activities,  the  normal  markets  and  normal  channels  of  trade 
of  the  industrv  were  in  large  measure  closed  to  it;  and  that,  had  the 


1)4  ECONOMICS   OF   THE   CONSTRUCTION    INDUSTRY. 

Will-  long  coritiiiued,  the  inevitable  result  would  hh\e  been  general 
discontinuance  of  operations  and  widespread  idleness  of  mills.  Tha 
general  leduced  demand  existed  in  spite  of  heavy  demands  for  special 
kinds  and  sizes  of  timber  for  tlie  Go^ernment  s  v.ar  needs.  In  the 
<  onstruction  of  cantonments  in  the  South  enonnous  quantities  of 
yellow  ])iiic  were  used.  There  was  also  a  great  demand  for  sliip- 
])uilding  timbers.  The  latter  demand,  it  has  been  stated,  resulted 
iu  a  slight  sur])lus  in  the  production  of  fir.  A  demand  for  spruce  was 
accentuated  by  the  use  of  this  wood  in  air])lane  constniction.  The 
demands  were  for  special  sizes  and  grades  and  much  waste  residted  iu 
seeming  the  proper  logs.  This  waste  or  by-product  was  of  small 
utility  and  was  left  in  the  forests  or  mill  yards,  or  sold  locally,  having 
little  or  no  effect  u])on  general  market  conditions. 

The  call  of  labor  to  service  in  the  Army  and  to  other  industries 
undoubtedly  criijpled  lumber  production  to  a  very  considerable  extent 
in  tliose  regions  where  there  was  a  great  demand  for  the  product. 
In  the  Southern  pine  region  the  labor  shortage  continued  well  into 
the  first  half  of  1919.  It  is  also  likely  that,  influenced  by  the  labor 
shortage,  lowered  efficiency  of  labor  contributed  to  the  decrease  of 
the  lumber  output. 

Apparently  there  were  sm-plus  stocks  of  lumber  in  1915  and  1916. 
These  surplus  stocks  were  largely  used  up  in  1917  and  19 IS.  Ques- 
tionnau-es  sent  to  the  retail  trade  thi'oughout  the  country  in  February, 
1919,  revealed  the  fact  that  stocks  at  that  time  were,  for  the  most 
part,  low.  Most  of  the  smaller  yards  of  the  country  were  fairly 
depleted.  The  stocks  that  were  normal  were  those  of  the  larger  cities. 
Out  of  the  65  yiu'ds  reporting  from  the  State  of  Ohio,  only  9  reported 
stocks  above  normal.  Of  40  yards  reporting  from  Connecticut,  only 
7  reported  stocks  above  normal.  Over  50  per  cent  in  each  of  these 
States  reported  less  than  the  usual  supply  on  hand.  In  many  other 
States  the  percentage  ran  about  50  per  cent  of  normal. 
Prewar  operating  conditions. 

As  an  industry,  lumbering  is  different  from  any  other  basic  indus- 
tiy.  The  very  abundance  of  standing  timber  in  the  hands  of  private 
owners  lias  been  considered  by  some  as  being  in  itself  a  weakness. 
There  are  some  economists  who  urge  that  the  undeveloped  timber- 
laud  should  be  held  by  the  Go^  ernment  and  the  right  to  cut  timber 
be  sold  as  the  needs  of  the  country  and  condition  of  the  market 
warrant. 

The  amount  of  working  ca])ital  behind  the  timber  holdings  has  a 
marked  inlluence  in  the  rai)idity  with  which  the  timber  is  marketed 
or  the  ])ohcy  behind  its  retention.  A  good  compaiison  is  offered 
in  the  States  of  Washington  and  Oregon.  The  former  is  a  State  of 
concentrated  holdings,  whereas  Oregon  is  one  of  decentralized  owuer- 
shi}>.     Ill  Washington  the  timber  is  being  cou^  erted  three  times  more 


ECOIS^OMICS   OF   THE   CONSTKUCTIOX    INDUSTRY.  9§ 

rapidh'  tlian  iu  Oregon.  There  are  many  reasons  fur  tlus;  among 
tliem,  accessibility  of  shijipiug  facilities,  lack  of  capital  on  the  part 
of  small  owners  to  exploit  their  holdings,  and  laws  that  prevent  the 
pooUug  of  interests  for  the  p^lrpose  of  exploitation. 

Assistant  Forester  WiUiam  B.  Greeley-  has  pointed  out  in  his  report 
on  "Economic  aspects  of  the  lumber  industr}"  that  competition  in 
tliis  industry  is  of  two  kinds — (1)  within  the  producing  region,  and 
(2)  between  different  regions  in  seUing  their  product  in  markets 
within  common  reach.  In  recent  years  there  has  also  developed  con- 
siderable competition  with  various  substitute  materials. 

The  problem  of  transportation  has  been  a  diihcidt  matter  in  the 
lumber  industry;,  because  of  the  constant  recession  of  som-ces  of 
supply  from  the  manufacturing  centers  and  the  ultimate  consumer. 

In  the  earh^  da\'s  of  the  industry  the  mills  were  built  at  the  sources 
of  supply  and  along  the  waterways,  such  as  the  Penobscot,  the  Hudson, 
and  the  Delaware  Ri\ers.  The  Great  Lakes  were  utilized  in  the 
development  of  the  North  Central  regions,  and  the  waterways  of  the 
South,  and  the  Gulf  ports  have  been  of  great  service  in  the  de^  elop- 
ment  of  that  region. 

Graduall}^  the  sujjply  receded  fui-ther  from  the  waterways,  making 
the  construction  of  roads  and  raih'oads  necessaiy.  This  added  to 
the  cost  of  production.  The  development  of  rail  facilities  led  to  the 
concentration  of  m.anufacturing  and  increase  in  the  size  of  the  mills. 
Freight  rates  increased  and  gi-aduaUy  came  to  absorb  one-fifth  to 
one-fourth  the  retail  price.  This  condition  played  a  large  part  in 
the  development  of  competitive  markets.  The  Middle  West  became 
a  hot-bed  of  competition  for  northern,  southern,  and  western  woods, 
while  the  markets  of  the  east  coast  suffered  from  actual  shortages  at 
times,  and  rates  higher  than  the  average.  The  opening  of  the  Panama 
Canal  has  served  to  equalize  this  condition  and  give  the  western 
woods  a  chance  to  enter  into  the  eastern  markets. 

The  practice  of  shipping  'transit'  cars  to  central  markets  in 
advance  of  any  purchivse  has  tended  somewhat  to  demorahze  the 
markets.     This  condition  has  been  in  evidence  since  190S. 

Close  economy  and  exact  business  methods  were  unkno^\'n  iu  the 
earlier  days  of  the  industry,  when  liberal  profits  could  be  coimted 
upon  to  make  up  the  deficiencies  caused  by  ineflicient  methods.  In 
many  cases  increases  in  stumpage  costs  were  capitalized;  wliereas, 
iu  accordance  with  safe  accounting  methods,  the  carrying  exj)euses 
should  have  been  provided  for  by  charges  against  piofiu^.  The 
profits,  however,  were  meager  in  many  cases,  and  the  tendency  was 
to  capitalize  this  burden  in  the  ho]>e  of  meeting  the  increased  cost 
of  stumi)age  in  more  favoral>le  years. 

The  memory  of  large  profits  made  in  the  earlier  days  of  the  iu(histry 
brought  about  an  undesirable  speculation  in  stumpage,  particularly 


96  ECONOMICS   OF   THE   CONSTRUCTION   INDUSTRY. 

in  t'iio  Nortliwost.  This  loci  to  overcapitalization  and  the  consc(|ucnt 
burden  of  high  interest  charges  and  high  taxes.  In  the  West,  par- 
ticularly, large  amounts  have  been  borrowed  on  the  timber,  adding 
further  interest  charges,  wliich  can  never  be  realized  imless  the  prioo 
of  the  manufactured  product  continues  to  increase. 

Although  there  has  been  great  improvement  in  accounting  methods, 
in  many  cases  those  of  to-day  are  not  altogether  scientific.  Much 
improvement,  however,  has  been  made  in  this  respect  within  the  past 
few  years,  due  to  the  progressive  spirit  of  the  leaders  of  the  industry, 
the  careful  study  of  its  problems  by  trained  economists,  and  the 
efforts  of  the  various  associations  of  manufacturers  and  dealers. 
These  associations  have  not  only  studied  accounting  problems  and 
standardized  methods,  but  they  have  also  given  considerable  study  to 
the  labor  problem.  The  lumber  producers  on  the  west  coast  seem  to 
have  established  a  commendable  cooperation  between  the  mill  ov/ner 
and  the  laborer. 

Sharp  competition  v/itlim  the  producing  areas  in  the  past  led  to 
overcapitalization  and  the  necessity  for  cutting  timber  wastefully  in 
order  to  pay  interest,  taxes,  and  other  fixed  charges. 

The  history  during  the  past  decade  has  been  one  of  small  margins 
and  close  selling — so  close,  in  fact,  that  in  many  cases,  m  hearings 
before  such  tribunals  as  the  Federal  Trade  Commission  and  the 
Interstate  Commerce  Commission,  it  has  been  actually  shown  that 
operations  were  being  conducted  at  a  loss  to  many  operators. 

Prior  to  the  war  the  Forest  Service  had  made  a  close  analysis  of 
representative  operations  from  1909'to  1914.  Each  year  dm*uig  that 
period  shows  a  decrease  m  return  on  the  operating  investment,  the 
decreases  ranging  from  3.3  per  cent  to  13.5  per  cent.  Dm-mg  the 
latter  part  of  the  year  1915  the  average  cost  per  thousand  feet  was 
greater  than  the  average  realization. 

Before  the  panic  year  of  1907  there  had  been  a  general  advance  in 
the  price  of  lumber  and  there  was  a  general  belief  that  prices  were 
unduly  high.  Investigation  shows  that  the  rises  in  prices  of  lumber 
on  the  average,  however,  were  only  slightly  in  advance  of  the  general 
rise  in  the  price  level  of  all  comimodities.  After  1907  lumber  fell 
behind  the  general  advance  of  other  commocUties  and  continued  to 
advance  less  rapidly  than  other  commodities  tlirough  the  war  period. 
The  price  record,  1913-1919. 

Fom'  tables  of  prices  on  lumber  for  the  years  1913  to  1918  and  for 
the  first  quarter  of  1919  are  presented  herewith  (Tables  21  to  24). 
Tables  21  and  22  give  quotations  of  actual  prices  on  particular  grades 
and  sizes  of  representative  species  of  lumber.  Tables  23  and  24  give 
average  prices  for  various  species,  together  with  relative  prices,  referred 
to  the  year  preceding  Jul}*,  1914,  as  base.     The  composite  indices  in  the 


ECONOMICS    OF   THE    CONSTRUCTION    INDUSTRY.  9? 

last  column  of  Table  24  are  those  computed  by  the  price  section  of 
the  War  Industries  Board. 

The  c[uotations  used  in  these  tables  wore  furnished  by  the  price 
section  of  the  War  Industries  Board.  That  organization  made  an 
extended  study  of  the  lumber  prices  through  the  war  period,  a  study 
made  by  experts  in  the  various  phases  of  the  lumber  industry.  The 
extensions  of  the  War  Industries  Board's  figures  into  the  j-ear  1919 
were  made  from  figures  obtained  from  various  trade  journals. 

The  number  of  grades  and  sizes  usually  quoted  in  the  trade  journals 
and  also  in  the  report  of  the  War  Industries  Board  on  lumber  prices 
is  so  large  that  it  has  been  considered  advisable  to  reduce  it  in  this 
presentation  to  an  exhibit  of  representative  grades  and  species.  More 
extensive  tables  can  be  found  in  the  two  reports  of  the  price  section 
of  the  War  Industries  Board,  one  on  lumber  prices  and  the  other  on 
price  fixing  by  Government  agencies. 

The  composite  indices  cover  averages  for  species  comprising  over 
four-fifths  of  the  total  production  of  lumber.  The  figure  for  the  lact 
quarter  of  1918  indicates  a  general  advance  of  73  per  cent  over  the 
prewar  figure.  This  is  rather  less  than  the  advances  in  most  other 
building  materials  and  in  most  of  the  other  groups  of  basic  commodities. 

The  curve  of  the  composite  price  index  would  follow  the  general 
tendency  of  the  curve  of  the  general  price  level  througli  the  six-year 
period.  (See  Chart  XI,  following  this  section.)  The  real  rise  came 
with  the  second  quarter  of  1917,  when  the  United  States  entered  the 
war.  The  peak  of  the  curve  occurs  in  the  third  quarter  of  1918,  just 
as  does  the  maximum  of  all  other  prices,  but  the  distinguishing  feature 
has  been  the  fact  that  the  lumber  curve  has  lagged  behind  the  other 
curves  and  that  the  decline  from  September,  1918,  was  very  slight. 
Lumber  prices  reacted  upward  in  the  spring  of  1919.  An  April  index 
would  be  approximately  175. 

Southern  yeUow  pine  and  Douglas  fir,  for  which  species  there  was 
gTeater  demand  than  for  the  others,  show  somewhat  greater  advances. 
The  figures  for  the  last  quarter  of  1918  show  a  rise  of  85  per  cent  on 
southern  yellow  pine  and  a  rise  of  91  per  cent  on  Douglas  fir.  Both 
species  advanced  somewhat  during  the  first  quarter  of  1919. 

There  wa.s  a  decline  in  production  after  the  year  1908.  At  that 
time  the  conditions,  as  pointed  out  in  the  paragraph  on  production, 
were  widely  different  from  1918  conditions.  In  1908,  in  spite  of  the 
curtailment  of  output,  prices  of  yellow  pine  declined  on  the  average 
45  per  cent  and  those  of  Douglas  fir  declined  30  per  cent.  As  the  price 
tables  show,  decreased  production  of  1918  was  at  the  same  time 
accompanied  by  a  general  increase  in  prices  of  nearly  12  per  cent  over 
those  prevailing  during  the  previous  year. 

Although  the  price  of  lumber  began  to  show  signs  of  increase  early 
in  1916,  the  increase  was  to  be  expected  as  a  result  of  increased  war 

121297°— 19 7 


98  Eco"sro?*iF(S  of  the  (;onstru<'TKin  industry. 

domands  and  tlio  jjjouoral  li-o  of  prirc^^  of  otb^T  ha<^ir  commodities. 
Ill  1917  the  liimbor  coinmittt'C'  of  tlio  Council  of  National  Dcf <*ii.s<' .  in 
agreement  with  the  Southern  Pine  Association,  iind  with  the  ai)i)roval 
of  the  wSecretary  of  War,  fixed  the  first  pric^  of  al>out  S24.85  for  th« 
purchase  of  yellow-pino  lumber  for  cantonment  constnictiou.  This 
price  was  approximately  60  per  cent  higher  tiian  thot  <>f  tli<'  prewar 
period . 

This  price  was  reduced  75  eents  per  tliousand  feet  on  3epleml>er  11, 
1917;  50  cents  per  thousand  feet  on  October  11,  1917:  and  40  cents 
per  thousand  feet  on  November  11,  1917;  making  hi  all  a  reduction 
of  $1.65  per  tliousand.  Early  in  1918  tlie  commercial  price  a<lvanced 
and  by  May  was  several  dollars  per  thousand  feet  liiglier  tlian  the 
Government  price.  On  June  14,  1918,  after  studying  carefully  infor- 
mation regarding  lumber  costs,  the  price-fixhig  committee  estab- 
lished a  maximum  price  of  approximately  $4.80  per  thousand  feet 
over  the  former  fixed  price.  This  amounted  to  about  $29.65,  or 
about  90  per  cent  higher  than  the  prewar  l)ase  price. 

This  price  continued  in  force  on  Southern  pine  until  December  30, 
1918.  After  that  time  the  fluctuations  were  scarcely  appreciable. 
Some  of  the  heavier  timbers  declined  slightly,  whereas  buiidiug 
lumber  ads'anced  in  many  locahties  so  that  the  average  remained 
practically  the  same  for  the  first  quarter  of  1919  as  for  the  last  quarter 
of  1918. 
Increases  in  production  costs,  1913-1919. 

In  the  paragraph  on  prewar  operating  conditions,  above,  it  was 
shown  that  a  numbei  of  factors  combined  to  cut  the  profits  on  lumber 
to  a  fairly  small  margin  on  the  average,  even  before  war  conditions 
brought  increases  in  production  costs. 

A  chart  ^  prepared  by  accountants  of  the  Soutiiern  Pine  Association, 
covering  a  number  of  years  up  to  and  including  the  first  part  of  1919, 
presents  a  curve  showing  the  fluctuations  of  the  average  realization 
per  thousand  feet  of  lumber  in  comparison  with  a  curve  showing  the 
fluctuations  of  the  average  cost  of  production.  The  divergence 
between  the  two  curves  varies  considerabh',  but  on  the  average  it 
indicates  a  margin  of  6  to  8  per  cent  of  realization  over  cost. 

Mr.  John  H.  Kirby,  president  of  the  National  Lum])er  ]\[anufa<'- 
turei"s'  Association,  in  his  statement  to  the  Industrial  T^oard  of  the 
Department  of  Commerce  on  March  22,  1919,  said — 

(1)  That,  if  the  prices  of  himber  had  been  so  lix^d  as  to  set  ure  maxiuiuni  productioa 
and  not  to  secure  the  continued  production  by  only  that  relatively  small  proportion  oi 
the  more  efficient  mills  whose  product  was  necessary  to  the  ^var  program,  the  base  price 
on  ordinaiy  lumber  of  iir  or  pine  would  have  been  fixed  at  more  than  $4()  per  thousand 
feet  instead  of  $2G  and  $28.  respectively. 

'  Exhibit  No.  5.    Aonuul  Report  of  SouUiero  riueCoHvontion.  vy.). 


ec'0^o:mic.s  of  the  coxstructiox  industky. 


99 


(2)  Thai  the  net  increase  of  I'lmber  prices  a!t^?r  the  beginning  of  the  war,  but  prior 
to  the  entrance  of  the  United  States  into  it.  had  been  but  little  more  than  the  increase 
in  production  costs. 

(3;  That  in  the  South  the  average  prire  received  at  the  beginning  of  1919  for  lumbei' 
by  more  thUuU  100  mills  was  $28.60,  only  60  cents  more  than  the  J>ase  price  fixed  ia 
June,  1918;  whereas  a%  erage  producing  costs  increased  more  than  $3  per  thousand  feet 
during  that  period. 

(4)  That  in  the  South  Atlantic  States  and  North  Carolina  pine  region  average  costs, 
as  of  the  first  part  of  the  year  1919,  were  in  substantial  excess  of  the  prices  receiA'ed  ikt 
thousand  feet. 

Estimates  have  been  prepared  on  the  distribution  of  the  average 
retail  price  as  between  tlie  manufacturer,  the  wholesale  dealer,  tha 
railroads,  and  the  retail  dealer  in  tlie  Middle  Western  market  before 
the  war  and  in  1919.  These  figures  are  presented  in  the  following 
table: 

Distribution  of  average  retail  prim — Middle  Western  markets. 
[Comparit^on  of  prewar  and  1919  prices.] 


Prewar. 

1919 

Per  cont 
of  in- 
crease. 

Amount. 

P«ro«nt 
of  total. 

Amount. 

Per  f  ent  '\ 
of  total. 

«15.20 

.99 

6.15 

6.77 

52.2 
S.4 
21.2 
23. 2 

S28. 88 
1.53 
7.25 
10.31 

60.2 
3.2 
15.1 
21.5 

90. « 

51.5 

n.s 

Retailer 

52.2 

29. 11 

100. 0 

47.97 

100.0 

04.7 

Prewar  figures  taken  from  OAerage.s  compiled  on  operations  of  yards  in  11  Middle  Western  States  by 
Forest  Servioe,  1912-1915.     Report  No.  114. 
Average  freight  rate  to  Central  distributing  points  from  Bogalusa,  La. 

The  foregoing  table  shows  an  increase  in  the  cost  of  manufacturhig 
of  90  per  cent  over  the  pre%var  cost.  It  should  be  noted  that  this  is 
only  on  a  comparatively  small  <'lass  of  operations  in  a  few  markets, 
and  that,  the  average  index  of  wholesale  prices  for  the  country  at  large 
is  not  so  high.  However,  this  series  of  operations  shows  a  retail  in- 
crease of  only  64.7  per  cent.  Of  the  elements  that  combine  to  make 
up  this  cost,  the  cost  of  manufacturing  is  by  far  the  greatest.  In  its 
relationship  to  the  total  price  it  has  increased  from  52.2  to  60.2  per 
cent.  In  this  same  relation  the  proportions  accruing  to  the  whole- 
salei',  to  the  retailer,  and  to  the  railroad  show  an  actual  decrease. 

The  relative  importance  of  tiie  factors  that  enter  into  manufac- 
turing costs  has  been  estimated  })y  the  West  Coast  Lumbermen's 
Association  for  prodncpfs  in  its  territory  as  follov.'s: 

Per  cent. 

Labor - -55 

Materials  and  suppUes 1^ 

Repairs,  depreciation,  and  general  expenses 22 

Stumpage,  at  $3.18 l-"' 

Total KK) 


100 


ECONOMICS   or   Till':   CONSTRUCTION   INDUSTRY. 


Tlio  operations  for  the  last  lialf  of  1918,  according  to  figures  pub- 
lished m  annual  reports  of  the  West  Coast  Lumbermen's  Association 
show  a  loss  on  56  operations  of  $1 .93  per  thousand  feet,  or  8.5  per  cent. 
This  includes  cost  of  logging,  manufacturing,  and  mercliandising. 

Machinery  and  supplies  of  all  kinds,  such  as  belting,  tools,  etc., 
probably  advanced  more,  on  the  average,  during  the  war  period  than 
did  the  average  price  of  lumber.  However,  the  largest  element  in 
manufacturing  cost  being  the  labor  cost,  tliat  item  is  probably 
argely  responsible  for  the  increase  in  cost  of  production  of  lumber. 

Increase  in  labor  cost,  1913-1919. 

Labor  costs  in  the  lumber  industry,  as  in  all  others,  liave  mounted 
gradually,  in  sj^mpatliy  \vith  the  rise  in  costs  of  food,  clothing,  and 
other  necessities.  While  increases  in  wages  were  necessary  on 
account  of  the  rise  in  the  cost  of  living,  labor  costs  in  the  lumber 
industr}'^,  according  to  statements  made  by  representative  producers, 
were  also  increased  by  the  decrease  in  the  efficiency  of  labor,  due  to 
competition  for  labor  on  account  of  the  war-time  shortage  and  the 
How  of  labor  into  more  profitable  channels.  The  following  is  a 
schedule  of  actual  wages  per  day  since  1913,  furnished  by  one  of  the 
associations  on  the  West  Coast: 


1913 $2.93 

1914 2.75 

1915 2.50 


1916. 
1917. 
1918. 


$2.  92 
3.64 
5.53 


This  shows  an  increase  of  88  per  cent.  When  it  is  recalled  that 
the  item  of  labor  comprises  about  55  per  cent  of  the  total  cost  of 
manufacture,  it  seems  probable  that  the  marked  increases  in  prices 
that  have  taken  place  have  not  netted  excessive  profits  (o  the 
producers. 

■  Another  interesting  comparison  is  afforded  from  the  southern 
pine  country.  A  comparison  furnished  by  one  of  the  Delta  Mills 
shows  tiie  follovrins  increases  in  labor  costs: 


Year. 

Cost  per  M. 

Wases  in 

c-euts  per 

hour. 

Hours  pex 
Mfeet. 

1913.. 

$5. 4308 
4.5817 
4. 2.579 
4. 595ii 
5.  o2lS 
C. 7773 

11.4791 

22.46 
21.  S7 
19. 04 
20.38 
23.76 
29.20 
37.81 

24.18 

1914 

20.95 

1915 

21.68 

191(1 

22.55 

1917..         .   . 

23.24 

1918 

23.21 

February,  1919 

30.36 

The  increase  shown  liere  amounts  in  actual  cost  per  thousand  feet 
to  1 11  per  cent ;  whereas  the  actual  rate  per  hour  shows  an  increase  of 
only  68.7  per  cent.  The  increased  number  of  hours  required  to  pro- 
duce a  thousand  feet  is  6.2,  a  rechiction  in  efficiency  of  25  per  cent. 


Chirt  furnishiHl  through  courtesy  of  I 
CHAR' 
121297°— 19.     (To  f;w<'  pago  110.) 


3TEELE.AR5 

UANUAlTi;!915"CURReNT  MONTUiaO 

,9,r  1     ,9,.     r     1 

n  i  5  ns 

^ 

19,5 

,9,4       i        ,9,5        1       ,9,» 

■,f    -'    J     ' 

S  J  S  i    !   i  S  4   !   i  i 

/ 

1 

\ 

J 

r" 

l 

60 

.. 

/ 

; 

\ 

^ 

/ 

I't's 

i  i  S  ■  !  1  s 

"i"i"i" 

"l"i"i  i  !  is 

,91.     ]       ,L 

ECONOMICS    OF   THE    ('OXSTRTTCTION    INDUSTRY.  101 

Most  of  the  southern  lumbermen  claim  a  reductioji  in  ofluicnov  of 
50  to  60  per  cent. 

With  cotton  selling  at  a  price  far  in  advance  of  that  of  former 
times,  and  the  price  of  other  farm  products  greatly  increased,  a  great 
drain  has  been  made  upon  the  sawmill  workers  of  the  South  in  favor 
of  the  cotton  plantation  and  the  farm.  The  shipyards  called  their 
quota  of  workers  from  the  Western  timber  belt.  The  draft  of  men 
for  the  Army  and  the  epidemics  of  the  1918  season  also  contributed  to 
scarcity  of  labor  and  the  decline  in  its  efRciency  in  the  forests  and  in 
the  sawmills. 

Tlie  statement  has  been  made  that  before  the  war  men  might  be 
secured  in  the  logging  camps  for  S55  to  $65  per  month,  whereas 
to-day  they  ask  $150  to  $160.  The  wages  for  men  engaged  in  the 
lumber  industry  have  followed  the  increase  in  the  scale. of  wages  for 
relatively  unskilled  labor  in  all  forms  of  industry. 

The  wage  scale  can  scarcely  be  reduced  by  any  radical  method  in 
any  quick  or  effective  way.  The  problem  for  the  future  seems  to 
resolve  itself  again  into  one  of  increased  production  and  improve- 
ment of  method.  New  machinery,  new  forms  of  organization,  and 
scientific  study  by  the  associations  of  lumbermen  may  determine 
upon  economies.  The  development  of  economic  methods  of  timber 
renewal  and  reserve  ownership  may  help  to  release  the  holdere  of  a 
great  deal  of  the  burden  of  nonproductive  stumpage.  Progi-essive 
lum])er  manufacturers  rely  upon  economies  of  this  sort  rather  than 
upon  attempts  at  reducing  the  wage  scale  for  the  profitable  operation 
of  their  business  in  the  future. 

Increase  in  transportation  costs,  1914-1919. 

The  table  of  freight  rates  (Table  25)  shows  increases  from  1914  to 
1919  on  rates  between  certain  markets  and  producing  centers.  As 
the  points  chosen  are  rather  widely  separated,  the  exhibit  may  be 
considered  as  a  fairly  representative  one.  If  the  average  increase 
of  17.7  per  cent  on  these  lumber  rates  be  fairly  representative  of  the 
general  increase  in  lumber  rates,  then  this  commodity  came  off  rather 
better  than  most  others  in  tlie  general  advance  in  rates.  Perhaps 
tliis  is  one  of  the  reasons  why  the  prices  of  lumber  on  the  average 
have  risen  somewhat  less  than  the  prices  of  most  other  building 
materials. 

The  shorter  hauls  along  tlie  Atlantic  coast  seem  to  have  had 
greater  increases  than  the  long  hauls  from  the  West,  thus  indicating 
a  tendency  to  make  the  eastern  markets  somewhat  more  accessible 
to  western  producers  than  was  formerly  the  case. 

The  table  given  under  the  paragraph  above,  on  increases  of  pro- 
duction costs,  1913-1919,  shows  that  in  the  ultimate  cost  to  the 
consumer  freight  has  decreased  from  21  per  cent  of  the  total  to  15 


1(12  ECOK"OMT<;S   OF   TIIK    COXSTRUCTION   ITTDrSTRY. 

pel-  cent  of  ihe  toliil.  Frei^hl  is  to-da}'  less  a  fsK-tor  tfjan  it  was 
five  years  ago.  These  lads  all  seem  to  indicate  evidence  of  dis- 
liru't,  compel i (ion  between  markets,  between  roads,  and  between 
water  and  rail  trans])orta(ion.  It  does  not  seem  proba}>le  that  there 
can  be  any  downward  revision  of  the  scale  of  rates  under  1919  con- 
ditions of  markets  or  rail  costs,  as  the  increases  in  rail  rates  have  not 
kept  pace  in  recent  ,years  with  the  increases  in  general  costs. 

Future  price  tendencies. 

After  the  signing  of  the  armistice  on  November  11.  1918,  lum}>er 
prices  showed  for  four  montlis  a  tendency  to  adhere  closeh'  to  the 
scliedule  prevailing  in  November.  In  some  markets  the  grades  in 
more  common  use  actually  increased  in  price.  The  index  for  the 
month  of  April,  J  91 9,  is  175,  which  is  two  points  above  the  figure  for 
the  preceding  six  months. 

So  long  as  the  general  level  of  prices  remains  high,  luml^er,  which 
has  advanced  less  than  most  other  commodities,  could  scarcely  be 
expected  to  decline  in  price. 

Factors  tliat  should  either  tend  to  maintain  lumber  prices  at  the 
general  level  of  the  first  half  of  1919,  or  cause  them  to  increase,  are 
the  development  of  the  domestic  demand,  which  lay  dormant  for 
several  years,  and  tlie  possibilities  of  foreign  demand  for  necessary 
works  of  I'econstruction  in  Europe. 

The  conmiittee  ou  material  cost  mvestigation  of  the  Illinois  State 
Legislature,  iu  its  report  published  May  6,  1919.  discussed  the 
various  factors  affecting  lumber  prices,  such  as  wages,  freight  rates, 
com])arisons  with  prices  of  other  commodities,  the  diminishing 
supply  of  timber,  and  the  prospective  increases  in  demand  both  in 
the  Iiiited  States  and  abroad,  and  stated  as  a  conclusion  that  both 
stumpage  values  and  kimber  prices  would  go  up  rather  than  down 
iu  the  future. 

There  are  factors  whicii  should  serve  as  brakes  on  coutmued 
increases  m  lumber  prices.  .Agencies  are  continually  at  work 
developmg  more  economic  methods  of  transporting  and  manu- 
facturing lumber  and  its  ]>roducts.  New  inventions  and  la1)or- 
saving  devices  are  replacing  more  expensive  forms  of  labor.  Oomimct 
organizations  are  being  effected  \\hich  prevent  much  of  the  waste  in 
merchandising  and  iu  distribution.  There  has  been  no  cessation  of 
the  fierce  c()m})etitiou  between  timber-producing  areas,  between  the 
large  distributors,  and  between  small  retail  yards  doing  business 
withhi  the  same  areas.  Competition  is  keener  than  ever  between 
lumber  and  materials  offered  as  substitutes  for  wood  ui  various 
types  of  building  construction. 


ECONOMICS   OF   THE   COXSTRFGTIOjST   USTDUSTRY.  103 

Prospects  for  export  trade  m  lumber. 

It  hns  been  stated  that  our  exports  of  lumber  in  tlic  })ast  have 
amounted  to  from  7  to  10  per  cent  of  the  total  domestic  production. 
There  appear  to  be  reasonable  ex])ectatious  of  greatly  increased 
demands  for  American  lumber  in  European  markets  as  the  European 
countries  develop  their  programs  for  reconstruction. 

In  the  years  preceding  the  war,  the  world's  lumber  ]>roductioii 
was  distributed  approximately  as  follows: 

Per  cent.  Per  cent. 


Paissia 33 

United  States 17 

Austria 1  '^ 


Sweden 12 

Canada 11 

Finland 19 


Russia  has  been  practically  put  out  of  business  as  a  ])roducer 
through  its  political  uj^heaval.  Austria's  production,  for  some 
years  following  the  ending  of  the  war,  will  be  seriously  curtailed. 
Both  have  heretofore  sup])iied  large  quantities  of  lumber  to  westeru 
Europe. 

Mr.  Roger  E.  Simmons,  one  of  the  trade  commissioners  sent  to 
Europe  by  the  Bureau  of  Foreign  and  Domestic  Commerce  to  invasti- 
gate  the  lumber  markets,  returned  to  this  country  early  in  1919. 
He  stated  that  early  in  1919  there  was  not  a  sawmill  running  m 
Russia,  except  m  the  Archangel  district,  where  the  allies  were  in 
control,  and  that  all  the  other  mills  were  dismantled.  He  further 
stated  that  if  the  revolution  should  end  at  once,  Russia  would  be 
unable  to  export  any  new  lumber  l^efore  1923. 

Exports  of  lumber  in  normal  years  before  the  war  were  as  follows: 

M  feet.  M  feet. 


Paissia 4, 6.50, 000 

United  States  and  Canada 3, 000. 000 


Norway  and  Sweden 2.  575. 000 

Austria 2.  202, 00© 


The  total  exports  of  all  countries  amounted  approximately  to  15 
billion  feet.  Mr.  Simmons  has  estimated  that  Russia's  T)ro])ortion 
of  exports  of  lumber  for  the  years  1919-1923  should  amount  to  seven 
billion  feet  per  year,  this  figure  being  based  on  the  percentage 
furnished  by  Russia  to  other  countries  before  the  war.  Mr.  Simmons 
considered  Russia's  probable  actual  supply  to  the  rest  of  Euro])e  for 
that  period  as  negligible. 

England's  housing  shortage  has  ]>een  variously  estimated  at  from 
300,000  to  500.000  houses;  France's  needs  have  been  estimated  at 
578,000  houses.  These  figures  give  an  indication  of  the  demand  for 
lumber  tliat  may  be  expected,  a  large  part  of  wliich  may  be  drawn, 
from  the  United  States  and  Canada. 

The  United  States  before  the  war  imported  some  luml)er,  al)out  4 
l)er  cent  of  the  domestic  production  on  the  average.  The  greater 
part  of  this  came  from  Canada.     England  will  probably  use  all  of 


104 


ECONOMICS   OF   THE   CONSTRUCTION   INDUSTRY, 


Canada's  available  suq)lus  f(»r  the  next  few  years,  Finland  can 
probably  make  up  part  of  Russia's  deficiency.  American  lumber 
interests,  already  organized  under  the  ])rovisions  of  the  Webb  law 
for  foreign  trade,  will  probably  be  called  upon  to  furnish  a  great  deal 
of  lumber  to  Europe  for  the  next  five  years. 

According  to  Mr.  Simmons's  statement,  lumber  was  quoted  at 
Archangel  in  January,  1919,  at  more  than  double  the  prices  quoted 
in  this  country  for  the  same  grades  and  sizes,  and  in  Sweden  at 
slightly  less  than  double  American  prices. 

The  matter  of  favorable  ocean  freight  rates  will  have  considerable 
weight  in  determining  the  amount  of  American  competition  in 
European  markets. 

All  the  facts  behig  considered,  the  expectation  of  lumber  manu- 
facturers for  a  considerable  foreign  demand  seems  justified.  The 
effect  of  such  demand  would  be  advances  hi  prices.  If  the  demand 
develops  to  large  proportions  its  effect  would  probably  be  greater 
than  that  of  such  otJier  factors  that  might  tend  to  cause  declines. 

Tabi  E  21 . —  Tables  of  overages  of  crtual  prices  on  particular  grades  and  sizes. 


Species . 


Market. 


Grat'e  an'l  size. 


1913. 
1914. 
1915. 
1916. 
1917. 
i91S. 


QuiUtcrly  averages  for  1917: 

First  quarter 

Seconil  (juarter 

Third  quaitcr. 


Southern  pellow  pine. 


Alabama,  -Vrkansas,  Louisiana,  Texas,  Mississippi. 


Finish  B 

and 

better 

6  inches 

and 

wider. 


$23. 0312 
23. 2227 
22. 0-i22 
24.6016 
33.6094 
37.  !>906 


27.  46S8 
34. 3438 
36.  3125 


Fourth  quarter 36. 312.5 

Quarterly  averages  for  1918:         i 

First  quarter 37. 2500 

Second  quarter 38. 2500 

Third  quarter |  38.0625 

l^ourth  quartei- ;  38. 0000 

Quarterly  averages  for  1919: 

First  quarter 37.  9500 


Common 

boards 

l-s2s 

1  by  10 

inches. 


Common 
boards 

No.  2  s2s 
1  by  8 
inches. 


Dimen- 
sion No. 
1-slslE 
2by8- 
16. 


$16.  7604 
15. 2656 
15.  4363 
IS.  043S 
25.  7969 
29.  S125 


20.12.50 
26.2.500 
as.  S125 
28.0000 


29. 3125 
31.3125 
29.0000 
29.0250 


30. 1250 


S12.  7354 
11.  21SS 
11.8.519 
14.6172 
21.4766 
26. 3438 


16.  46SS 
23. 3125 
22.  4375 
23.6875 


25. 5000 
28.  4375 
25. 6250 
25.  8125 


26.8750 


S12.  4.537 
11.  20S3 
12. 3792 
14. 9931 
19. 9792 
22.6000 


16.  .3.333 
21.9722 

20.  son 

20.  7oi.iO 


21.4722 
2J.  6(567 
22.7500 
22. 5556 


25. 6250 


Timbers 
slslE 
6by  8- 
16. 


S14.4643 
12. S750 
12. 9070 
15. 7679 
21.7500 
25.5179 


17.4286 
22. 1429 
23. 8929 
23.5357 


25.1429 
25.9286 
25.  4286 
25. 5714 


25. 6250 


Douglas  fir. 


F.  0.  b.  Washington 
mills. 


Common 

boards 

No.  1-sls 

1  bv  10- 

20. 


S9.20S3 
7.9167 
7.  S7.50 
10. 3750 
15.  S750 
18. 2500 


11.83.33 
16.0000 
18.  .")0(X) 
17. 1667 


18-5000 
18.5000 
19.5000 
16.5000 


O19.5000 


N0.2C 

and 
better 

drop 

siding 

Ibv  6- 

15. 


817.3333 
14.2917 
14. 2917 
18.5833 
23. 9167 
28.0000 


19.6607 
2:5.6667 
26.0000 
26.3333 


27.0000 
27.0000 
31.0000 
27.0000 


30.0000 


a  Dimension,  S  1  S  1  E,  2  by  4  substituted. 

A>)ove  fitnires  from  War  Industries  Board  tables  except  1918-1919  computed  from 
published  iu  "  Lumber"  by  Journal  of  Commerce  Co. 


market  quotation 


ECOXOMICS    OF    THE    COXSTRTJCTIOX    IXDUSTKY.  105 

Tablf,  22. —  Tables  of  averajes  of  actual  prices  on  particular  grades  arid  sizes. 


Species  - 


Market. 


Grade  and  size. 


1913 $31. 3519 

1914 28. 4722 

1915 27. 1972 

1916 29. 2572 

1917 34. 0264 

1918 39. 5653 

Quarterly  averages  for  191 

First  quarter 

Second  quarter 

Tiurd  cjuarter 

Fourth  quarter I    35. 6111 

Quarterly  averages  for  1918: 

First  quarter 

Second  quarter 

Thii-d  quarter 

Fourth  quarter 

Quarterly  averages  for  1919: 

First  quarter 


Oak. 


Spruce. 


West 
Virginia, 
Tennes- 
see, Ken- 
tucky, 
Arkansas. 


Boston. 


No.  1 

common 

jjlain 

white, 

4/4. 


30. 8889 
3;^.  7222 
35. 8833 


37.  7611 
40. 1667 
39.9444 
40. 3889 

40.0000 


Covering 
boards, 
5inohes 
and  up. 


S22. 9904 
21.4832 
19. 6202 
21.2075 
29. 0245 
37.9519 

24. 14.58 
29. 3846 
30. 5769 
31.6154 

33. 4615 
3S.  4615 
39. 9231 
39.  %15 

39. 0000 


Random, 
2  by  10. 


Hemlock. 


Eastern  white  pine. 


Michigan  and 
"Wisconsin. 


Common 
boards, 

SIS, 
1  by  8-16. 


No.  1 
fencing, 
1  bv  6. 


?24.  7933 
23. 9a?8 
23.  7115 
27.  2500 
35. 5480 
44. 6538 

33. 3077 
35. 1154 
34. 3750 
39. 4792 

41.6154 
46.0000 
4.5.5000 
45.5000 


S20.4445 
18. 8333 
IS. 1667 
21.4792 
27. 64-58 
31. 1042 

23.8333 

2S.  7500 
29. 1667 
28. 83.33 

29. 1667 
30. 0000 
32.  7500 
32. 5000 


4.5.  .5000  :  33.5000 


S19. 8056 
18. 1458 
17.  2500 
20. 4792 
26. 4583 
30.1250 

23. 1667 
27.7500 
27.4167 
27.5000 

27. 8333 
29. 1667 
32. 0000 
31.5000 


Minnesota  and 
Wisconsin. 


No.  2 

boards, 

1  by  8-12. 


S23..T00O 
22. 89.58 
2:3. 4167 
26. 0833 
34. 0S33 
40.3333 

29. 3333 
34. 0000 
30. 3333 
36. 6667 

38.6667 
40. 6667 
41.0000 
41.0000 


32.0000  I  I  41.0000 


Dimen- 
sion, No. 
1-SlSlE, 
2  by  4-16. 


520.5833 
20.5000 
17.9583 

20. 7083 
27. 1667 
30.7083 

22.8333 
27.5000 
29. 1667 
29.1667 

30. 1667 
30. 6667 
31.0000 
31.0000 

>  33.2500 


1  Minneapolis  market. 

Table  23. — Comparison  of  averages  of  actual  prices  and  relative  prices  on  most  important 

species  of  lumber. 


Southern  yellow 

Eastern  white 

Hemlock. 

pine. 

pme. 

Average 
realiza- 
tion. 

Relative 
prices. 

Average 
realiza- 
tion. 

Relative 
prices. 

Average 

realiza- 
tion. 

Relative 
prices. 

Average 
realiza- 
tion. 

Relative 
prices. 

Base... 

SI 5. 2930 

100 

SI  1.. 5-11 7 

100 

$:51. 6328 

100 

$19. 0:395              100 

1913 

16.P576 
14.  a-lSi 
14.6^12 
17.4340 
24. 46SS 
2S.  1449 

19. 4221 
25. 5-383 
26. 3a39 
26. 4.568 

27.  8332 
29. 6730 
28. 1391 

28.  2920 

29.  2000 

105 

13.1,575 

114 
96 
96 
125 
177 
205 

138 
177 
200 
192 

203 
203 
222 
191 

214 

31.9491 
31.316-1 
30. 3674 
32.5817 
42.  7042 
51.2451 

36.3777 

42.  7042 
45. 2349 

45.  8675 

48.  7145 
51.5614 
52.  8267 
52. 1941 

48. 3333 

101 
99 
96 
103 
135 
162 

115 
135 
143 
145 

154 
163 
167 
165 

1.52 

19. 9914 
18. 2779 
17. 5163 
20. 75.30 
26. 6553 
30.  2728 

23.0377 
27.  7976 
27.9SS0 
27. 7976 

27. 9880 
29.  7016 
31.6055 
31.6055 

32.8750 

105 

1914 

95  11.0790 

96  11.0790 
114       14.4271 
160       20.4288 
186        23. 6604 

96 

1915 

92 

1916 

109 

1917 

140 

1918 

1.59 

Quarterly    averages    for 
1917: 
First  quarter 

127 
167 
172 
173 

182 
194 
184 
185 

190 

15.9275 
20. 4288 
23. 0834 
22.1600 

23.4296 
23.4296 
25. 6225 
22. 0446 

24.  7500 

121 

Second  quarter 

Third  quarter 

Fourth  quarter 

Quarterly    averages    for 
1918: 
First  quarter 

146 
147 
146 

147 

Second  quarter 

Third  quarter 

Fourth  quarter 

Quarterly    averages    for 
1919:  First  quarter 

156 
166 
166 

172 

Note. — Southern  yellow  pine,  average  of  prices  on  5  grades  and  sizes.  Douglas  fir,  average  of  prices  on 
No.  1  common  1  by  8  and  No.  2  and  l)otter,  drop  siding.  Eastern  white  pine,  average  of  prices  on  8  grades 
and  sizes.     Hemlock,  average  of  prices  on  4  grades  and  sizes. 

Base,  in  all  cases:  Average  of  prices  for  year  July  1,  1913,  to  June  30,  1914. 


106 


E('oxo:\TTc?;  of  Tin:  coxsTitrfTiox  ixnusxr.Y, 


Taiu.k  21. — Coinparison  of  averages  a/  orl ual  prires  and  relalii  p  prices  on  mostimpuriit! 

species  of  hnnher. 


Species . 


^priiei'. 


Cypress. 


<  'o<{ar  sliingtes. 


AveraKC 
realiza- 
tion. 


Ba.sc %  1 .  2i  •<! 


1913 

1914 

1915 

1916 

1917 

1918 

1917,  by  quarters 

First 

Second 


I  .Jot) 

5402 
S122 
7243 
9756 
9548 


30.3353 
33.7329 

Third i    34.4009 

6158 


Fourth 

1918,  bv  cinaiters: 

First 

Second 

Third 

Fourth 

1919,  by  quarters:  First. 


0719 
6829 
6536 
6536 
3181 


I^r-la- 

tive 

prices. 


.V  vorapc 
realiza- 
tion. 


!tM>     $41.8616 


102 
97 
94 
lOtj 
140 
177 

125 
139 
142 
l.w 

161 
180 
184 
184 
178 


42.7399 
41.1203 
40. 5857 
42. 8933 
49.30a3 
61.0920 

45.3974 

46. 8726 
52. 9769 
53.8923 

60.428.5 
63.4200 

(') 

f) 
64.5000 


Rela- 
tive 
prices. 


A  verapc 
realiza- 
tion. 


$27.8000 


102 
98 
97 
103 
118 
146 

108 
112 
126 
129 

144 
151 

f) 
") 
l.>4 


28.6340 
26.  UOO 
25.0200 
26.9660 
31.4140 
37.5300 

28.3560 
31. 1360 
32.  S040 
33.3600 

35.8620 
38.fJ860 
38.0860 
38.  :>(i40 
37.;;750 


Rila- 
livi- 
!)rices 


100 


103 

95 
90 
97 
113 

13" 

102 
112 
118 
120 

129 
137 
137 
138 
134 


Average  !  Rela- 

realizu-   j    ti\e 

tion.     I  prices 


$1.79.58 


100 


1.96ti7 
1.7125 
1.6642 

i.rnw 

2. 8175 
2.7942 

2.3900 
3.0967 
3.003-3 
2.7800 

2.8367 
2.  M07 
2.S667 
2. 4767 
2.6500 


1U9 

95 

93 
106 
157 
1'6 

133 
172 
167 
154 

158 
167 
160 
138 
148  I 


Com- 
posite 
iii'li'  < . 


lOi 
96 
94 
HH 
14« 
172 

122' 
l.-WI 
VA 

Iwi 
ITd 
17* 
173 

173 


'No  quotations  obtainaljle. 

TCoTE. —Spruce,  average  of  prices  on  11  grades  and  sizes.    Cypress,  average  of  prices  on  6  grad«*s  and  .sizi-. 
Oak,  average  of  prices  on  4  grades  and  sizes.    Red  cedar  sliingles,  average  of  orices  on  clear,  raadoii;, 
16-inch. 
■'  Base,  in  all  cases:  Average  of  pric-es  for  year,  July  1,  1913,  to  June  .".0,  1914. 

Table  25. — Comparison  of  freight  rates  on  hnnher  from  producing  minis  to  cerUers  <tf 
,  distrihation . 

[Carload  lots  per  100  pounds.] 


Bogalusa,  I  a.,  to  Chicago 

Portland,  Greg.,  to  Chicago 

Coeur  d'Alene,  Idaho,  to  Chicago. 
V\'ausau,  Wis.,  to  Chicago. ....... 

•        Average  increase 


Bogalusa,  T,a.,  to  Kansas  City,  Mo 

Portland,  '  >reg.,  to  Kan.sas  Citv,  Mo 

Coeur  d'Alene,  Idaho,  (o  Kansks  City,  Mo. 

Wau.sau,  Wis.,  to  Kansiis  (liy,  Mo. ". 

Average  increase 


.23    1 

.30 

32  II 

..50 

..5-5 

10  0 

.47     1 

..52 

10  -i 

■■22     i 

.27 

22  8 

l.S  5 

Bogalu.sa,  La.,  to  Minneapolis 

Portland,  Oreg.,  to  Minneapolis. . 

Wausau,  Wis.,  to  Mliuieapolis 

Coeur  d'.Vlcne,  Idaho,  to  Minneapolis. 
AA-erage  increase 


■■■) 

.38    1 

18  S 

.  ;" 

.  .-.rt  : 

11  t 

:  1 

1>! 

25  a 

.42 

.^7-: 

11.^ 

Bogalusa,  La.,  to  Xew  York 

Wausau,  Wisconsin,  to  N'ew  ^'ork. 

Norfolk,  Va..  to  New  York 

Willianisport,  Pa.,  to  New  York... 
Average  Increase 


Bo,alusa,  La  ,  to  St.  Louis 

Wausau,  Wis.,  to  St.  Louis 

Portland,  Ore.,  to  St.  Louis 

Coeur  d'Alene,  Idaho,  to  St.  Louis. 
Average  increase 


Norfolk,  Va.,  to  Boston 

Willianisport,  Pa.,  to  Bostou. 
Average  increase 


Norfolk,  \'a.,  to  Philadelphia 

Willianisport,  Pa.,  to  Philade 

X  \erage  increase 


lelphia. 


General  averaso  iuereus 


360 


340 


320 


EC0X0:^ITC3   OT  THE    CGXSTPvTCTIO^T    I^DT'STTir. 

■piTIIIU   III  Mf— I—— ■WW— in 


lOT 


LEGEND 


WHEAT  — ^ 

Soiji'ce: Don's  Rev.ew-fJa  S  Red) 

5TEEL    "■■ 

LUMBER 


gJC'LY  13!  7 

A 

'    t     a 
!    «     5 

:  *    • 

MAYI9I7.<S        \ 

i 

1     i 

•  i 

1  } 

2  1 

-:!      1 

^     1 
<     1 

ll..„.-: 

60 
340 

320 
300 

230 

2S0 


COMPARISON  OF  PRICE 
FLUCTUATIONS 

WHEAT- STEEL- LUMBER 
1913-1919 

U.S.  DEPARTMENT   OF  LABOR 

INFORMATION  AND  EDUCATION  SERViCE 

OIVI5I0N  OF  PUSLiC  WORKS   AND  CON5Tr?UCTI0'"^J  OEvElOPMEMT 

CHART   XI 


108  ECONOMICS   OF   THE   CONSTRU(^TION    INDUSTRY. 

SECTION  VIII.  IRON  AND  STEEL  PRODUCTS  USED  IN    CONSTRUCTION. 

General  iiiforniatioii  on  the  steel  industry. 

The  various  conditions  afTecting  war-time  prices  and  production  in 
the  steel  industry  in  general  are  set  forth  in  Section  If  of  this  chapter. 

Explanation  of  price  table. 

Price  Table  20  gives  quoted  and  relative  prices  on  structural 
steel,  steel  bars,  wire  nails,  rivets,  and  6-inch  cast-iron  pipe.  In 
the  absence  of  price  data  on  concrete  reinforcing  bars,  the  price 
series  on  mei'chant's  bars  is  included  as  being  typical  of  this  general 
class  of  steel  products.  The  composite  index  figures  given  are 
averages  made  by  a  somewhat  arbitrai-y  weighting  system,  structuial 
steel  indices  having  been  counted  twice  to  once  for  each  of  the  others, 
as  indicating  in  a  rough  way,  its  relative  importance  in  construction. 

Fluctuations  of  structural  steel  prices  in  comparison  with  those  of 
lumber  and  of  vdieat  are  shown  on  Chart  XL  Chart  XII  shows 
fluctuations  of  prices  of  steel  bars. 

It  is  interesting  to  compare  the  increase  in  prices  on  6-inch  cast-iron 
pipe  mth  the  prices  of  gray-forge  pig  iron,  the  raw  material  from 
which  most  cast-iron  pipe  is  made.  Comparative  figures  are  given 
in  the  table  below: 


Gray  forge 

pig  iron 

(per  gross 

lea). 


6-mch  pipe 

(per  net 

ton). 


July  1,  1913,  to  June  30,  1914:  | 

Qnoied  price : I  .?14.  33") 

Relative  price '■  100 

December,  1918: 

Quoted  price : 1  S36. 900 

Relative  price !  2."8 

April  8  1919 S29.  a50 

Rclat  ive  price 20" 


$22. 22,iS 
100 

?67. 7000 
304 

557.7000 
259 


The  funires  for  frray-forgc  pi^  iron  are  for  tlv,-  I'liil.^delphia  market,  the  source  of  infoiTnation  Iwing  tlie 
Iron  Age. 

In  the  year  1914  a  net  ton  of  pipe  cost  55  per  cent  more  than  a 
gi'oss  ton  of  pig  iron;  in  December,  1918,  a  net  ton  of  pipe  cost  84 
per  cent  more  than  a  gi'oss  ton  of  pig  iron;  and  in  April,  1919,  a  net 
ton  of  cast-iron  pipe  cost  94  per  cent  more  than  a  gi'oss  ton  of  pig 
iron.  The  increase  in  the  differential  of  pipe  prices  over  pig  h'on 
prices  is  probably  due,  in  considerable  measure,  to  the  greatly 
increased  labor  cost  of  the  manufacture  of  pipe. 

Early  in  the  year  1019  there  seemed  to  be  a  verv  large  potential 
demand  for  cast-iron  pipe  for  various  public  works  projects.  Buyers, 
however,  were  not  willing  to  make  contracts  at  the  prices  prevailing 
and  not  much  activity  was  displayed  in  the  market.  In  view  of  the 
needs  for  this  product  it  is  possible  that  the  reduced  price  may  be 
followed  by  considerable  purchases  of  pipe  for  these  pwjjects  that 
have  been  delaved. 


ECONOMICS   OF   THE   CONSTRUCTION    INDUSTRY. 


109 


Freight  rates  on  iron  and  steel  products. 

Tables  27  and  28  give  freight  rates  on  pig  iron  and  on  finished 
iron  and  steel  materials.  These  rates  are  more  or  less  repre- 
sentative. Although  the  average  of  the  increase  in  rates  is  given,  it 
can  not  necessarily  be  taken  as  indicating  the  average  increase  in 
rates  the  country  over,  but  it  may  stand  as  an  indication,  with  a 
considerable  margin  of  error.  It  is  beyond  the  scope  of  this  investi- 
gation to  make  any  complete  sm*vey  of  freight  rates. 

Table  20. — Prices  of  iron  and  steel  products  used  in  construction. 


1.  Structural. 

steel. 

2.  Steel  bars. 

3.  Wire  nail.>^. 

4.  Rive  s. 

5.  6-inch  cast- 
irca  pipe. 

Com- 

Period. 

Price 
per  c%vt. 

Rela- 
tive 
price. 

Price 
per 
cw-t. 

Rela- 
tive 
price. 

Price 
per  cwt. 

Rela- 
tive 
price. 

Price 
per  cwt. 

Rela- 
tive 
price. 

Price 

per  short 

ton. 

Rela- 
tive 
price. 

posite 
index 
figure 

JrJvl,  1913,  to  June 

30,  1914 

1913 

SI.  2675 
1.50 
1.15 
1.30 
2.73 
.3.67 
2.99 

2.97 

2.80 
2.80 
2.80 
2.45 
2.45 

100 
119 
91 
103 
201 
2S0 
236 

234 

221 
221 
221 
193 

193 

SI.  26 
1.  .38 
1. 15 
1.31 
2.48 
3.49 
2.89 

2.87 

2.70 
2.70 

2.70 
2.35 
2.35 

100 
110 
91 
104 
197 
277 
229 

227 

214 

214 
214 
1.S7 

187 

-81.  .5975 
1.70 
1..56 
1.66 

2.  53 

3.  .56 
3.50 

3.50 

3.50 
3.50 
3.50 
3.25 
3.25 

100 
107 
98 
104 
159 
2:^3 
219 

219 

219 
219 
219 
203 

203 

SI.  7433 
1.99 
1.55 

1.62 
3.08 
4.  S4 
4.  .12 

4.40 

4.40 
4.40 
4.20 
4.20 
3  70 

ICO 
114 
89 
93 
211 
278 
260 

252 

252 
252 
2^1 
2^1 
212 

$22. 2258 
23.37 
20.90 
22. 94 
31.62 
55. 31 
00.65 

67.70 

66.10 
62.70 
62.  70 
62.70 
57.  70 

100 
105 
94 
103 
142 
249 
273 

304 

296 
282 
282 
282 
259 

100 
112 
92 
102 
185 
268 
242 

245 

237 
235 
233 
210 

208 

1914 

1915 

1916 

1917. 

1918 

Last  quarter,  1918.  . 

January,  1919 

February,  1919 ..... 

March  11,  1919 

March  25,  1919 

April,  1919 

1.  Stnictiual  steel:  Market,  Pittsburgh:  source,  the  Iron  Ago.  2.  Steel  bars:  Market,  Pittsburgh:  source, 
W.  I.  B.  Bulletin  No.  Sand  tlie  Iron  A}:e.  3.  Wire  nails:  Market,  Pittsburgh;  source,  tlie  Iron  Age. 
4.  Rivets:  ^Market,  Pittsburgli;  source^  W.  I.  B.  Bulletin  No.  5  and  the  Iron  Age.  5.  6-inch  cast-iion 
pipe:  Market.  New  York;  source,  the  Iron  Age. 

Base:  In  all  cases  base  equals  average  of  prices  from  July  1,  1913,  to  June  30,  1914. 

Table  27. — Frevjht  rates  on  pig  iron. 
[Per  ton  in  carload  lots.] 


From— 


To— 


Increase. 


Mahoning  and  Shenango  Val- 
ley. 


Buflalo,  N.  Y. 


Virginia  himaces. . 
Birmingham,  Ala. 


Average. 


Cleveland,  Ohio. 


Newark,  N.  J. . 
Pittsburgh,  Pa. 
St.  Louis,  Mo . . 


Albany.N.Y 

New  England 

New  York  and  Brooklyn,  N.  V 

New  England 


Cincinnati,  Ohio. 

Cliicaco,  111 

Cleveland,  Ohio. . 
New  York,  N.  Y. 
Pittsburgh,  Pa... 


SO.  95 

2.85 

.95 

3.18 

1.20 
2.  45 
2.40 

3.25 

2.90 
4.00 
4.00 
6. 15 
4.90 


$1.40 

4.80 
1.40 
4.60 

1.75 
3.90 
3.  90 

4.70 

3.60 
5.00 
.5.00 
7.70 
5.70 


Per  cent. 
47 

68 
47 
45 

46 
59 
62 

45 

24 
25 
25 
25 
17 

41 


Source:  Iron  Trade  Review. 


110 


ECONOMICS   OF   TffE   CONSTRUCTION    INDUSTRY. 

Tahm',  28. —  Freitihl  ralea  rm  iron  onfl  r>lfel  '  fmifihed  vi'ilervilitS. 
[lii/cark)a<l  lots,  per  lOOpoumt^.] 


From  I' 

iltsbiugh,  Pa.,  li<— 

1914 

1919 

Incroa-w. 

80.16 
.IS 

.30 

SO.  27 
.27 

.  33.-. 

1.25 

Pfr  cent. 
6^ 

M 

f^l  .   JylUlls,    \i(l    

13 

2<l 

54 

r><) 

i 

Source:  Iron  Trade  T{<'\iow. 

SECTION  IX.  CL.\Y  PRODUCTS. 
Introduction. 

The  outstanding  feature  in  the  chiy-prochicts  industry  for  the  past 
decade  has  heen  the  dechne  in  t]\e  relative  importance  of  lirick. 
Common  ])ri('k  readied  the  ])e{ik  in  f(uantity  of  pnxkiction  in  t!i0 
year  1906. 

This  decline  has  heen  accompanied  by  a  considerable  increase  ia 
production  of  fire  brick,  hollow  tile,  architectural  terra  cotta,  and  sewer 
pipe. 

To  a  faiii}'  considerable  extent  terra  eotta  and  hollow  tile  have 
replaced  ln-ick  in  construction.  Perhaps  to  an  even  greater  extent 
i^  tiie  decline  in  importance  of  bricdv  due  to  tlie  vastly  increased  use 
of  cement  in  construction. 

The  number  of  lirms  re})orting  to  the  United  vStates  Geological 
Sur^'ey  sales  of  day  products  was  largest  in  1S09,  when  6,962  firms 
were  listed.  This  numl)er  declined  steadily  until  1917,  when  .3.162 
firms  reported.  This  decrease  has  probably  been  largely  due  to  the 
elimination  of  many  of  the  smaller  ])lants,  which  has  been  ascribed  to 
the  encroachment  of  concrete  construction  ]>ractiee  and  to  the  con- 
solidation of  plants  for  more  efficient  management. 

Imports  have  consisted  chiefly  of  the  higliest  grades  of  ware.prin- 
cipall}' pottery,  and  have  not  been  a  factor  in  the  ])rick  and  tile  mar- 
kets. Except  for  kaolin  and  china  day,  ini]>orts  of  clay  are  unim- 
portant . 

Exports  of  day  products  are  also  relatively  unimportant,  fire  brick 
being  the  most  important  member  of  the  group  in  this  respect.  More 
than  half  of  our  exports  of  clay  products  go  to  Canada.  Ex]>ort.s 
reached  tlio  maximum  value  in  1917,  $6,953, 26o.  This  figure  was  2.  3 
per  cent  of  the  total  \  alue  of  day  products  sold  in  this  country  iu 
that  year. 

Production  figures,  1908-1917. 

Production  figures  compiled  by  the  United  State.^^  Geological  Sur- 
vey on  tlie  various  groups  of  clay  products  are  shown  in  Tables  29 


ECONOMiaS   OF   THE   GOK^STRUCTIOIf   UST&USTRY.  Ill 

to  32.  Quantities  and  average  prices  are  given  only  on  coiimion, 
vitrified,  and  front  brick.  lu  the  case  of  the  other  products,  figures 
on  quantities  are  not  available.  Totals  of  values  for  each  class  of 
products  are  given,  together  with  the  percentage  of  the  value  of  each 
product  in  terms  of  the  total  value  of  clay  products  manufactured 
dui-iug  the  period  in  question. 

These  figures  show  that  in  the  decade  1S98-1007  (ommon  ])rick 
amounted  to  89.6  per  cent  of  the  total.  In  the  year  1917  common 
brick  was  19.3  per  cent  of  the  total.  Fiie  brick  amounted  to  9.2 
per  cent  of  the  total  in  the  period  1898-1907;  in  1917  they  amounted 
to  23.4  per  cent  of  the  total.  HoUow  building  tile  accomited  for  2.5 
per  cent  in  189S-1907;  in  1917  it  was  5.3  per  cent  of  the  total.  Pot- 
tery shows  a  slightly  greater  relative  importance  in  1917  than  in  tlie 
period  1898-1907. 

The  1917  figure  for  the  total  value  of  clay  products  is  just  about 
double  the  figure  for  the  average  of  1898-1907.  This  probably  does 
not  represent  so  great  an  increase  in  tlie  quantity  produced,  as  prices 
rose  somewliat  between  1908  and  1917. 

Production  in  1917  and  1918. 

The  production  figures  for  1918  are  only  roughly  estimated,  and 
are  to  be  underetood  as  liable  to  a  considerable  margin  of  error. 

The  quantity  of  common  brick  produced  in  1917  was  a  little  over 
20  per  cent  less  than  m  1916. 

If  the  1918  figures  are  somewhere  near  correct,  then  the  produc- 
tion of  common  brick  amounted  to  onl}'-  48  per  cent  of  the  previous 
year,  and  to  38  per  cent  of  1916. 

The  year  1917  was  characterized  by  miusual  conditions  m  the 
clay-workmg  industries.  There  were  strikes,  scarcity  of  labor  and 
raw  materials,  and  unfavorable  transportation  conditions  to  be 
contended  with.  The  year  1918  was  freer  from  strikes,  but  the. 
cui'tailment  of  building  operations  and  the  Government  order  cur- 
tailing production  to  50  per  cent  of  normal  operatexi  to  reduce  pro- 
duction very  considerably.  In  fact,  producers  of  common  brick 
were  almost  put  out  of  business  b}'  the  adverse  conditions  with 
wliich  they  were  confronted. 

Tlie  order  of  the  Fuel  Achninistration  curtailing  production  called 
for  a  reduction  of  50  i>er  cent  in  clay  di'ain  tile  and  clay  roofing  tile 
and  25  per  cent  m  hollow  buildkig  tile.  However,  the  figures  do 
not  mdicate  that  these  products  suffered  quite  so  much  as  building 
brick  in  1918. 

War-time  production  of  refractory  products. 

Tlie  one  product  of  this  group  which  shows  a  marked  increase  in 
1917  and  1918  is  fire  brick. 


112  ECONOMICS   OF   THE   CONSTRUCTION    INDUSTRY. 

Vivo.  ])rick  increased  in  value  88i  per  cent  jji  1017  as  over  1916. 
This  would  probably  represent  an  increase  of  about  17  per  cent  in 
quantity. 

The  1918  figures  indicate  an  increase  in  value  of  128  per  cent  over 
1916,  which  would  indicate  a  probable  increase  of  12  per  cent  in 
quantity  produced. 

The  reason  for  this  increase  wa,s  the  demand  for  fire  brick  for  use 
in  the  munitions  industries.  Fh*e  brick  were  in  special  demand  in 
the  erection  of  by-product  coke  ovens,  which  requii'e  large  quanti- 
ties of  high-grade  refractories. 

The  iniportance  of  refractories  has  groA\'ii  with  the  expansion  of 
industry.  Thoy  are  used  in  the  iron  and  steel  industry,  in  the  manu- 
facture of  lead  and  zinc  and  glass,  in  bakeries  and  tanneries,  in 
kitchen  stoves  and  ranges,  and  m  the  burning  of  many  clay  products. 

The  increased  demand  for  fire  brick  proved  the  salvation  of  many 
of  the  manufacturers  of  architectural  terra  cotta.  Their  product 
declined  in  total  value  more  than  50  per  cent  in  1918.  Such  manu- 
facturers as  had  the  facilities  for  the  production  of  fire  brick  con- 
centrated theu-  attention  on  this  Ime  and  tided  themselves  over 
the  period  of  depression  in  this  manner. 

Regional  production. 

Clay  products  are  produced  in  varymg  amounts  in  all  the  States. 
The  States  of  greatest  production,  in  1916,  were  Pennsylvania, 
Ohio,  Illinois,  New  Jersey,  New  York,  and  Indiana.  They  are 
named  in  the  order  of  their  importance.  Those  of  least  importance 
were  Wyoming,  Vermont,  and  Arizona. 

All  the  States  produce  common  brick.  Vitrified  brick  are  pro- 
duced mainly  in  the  Central  West,  with  some  in  the  Pacific  Coast 
States.  Drain  tile,  sewer  pipe,  and  hoUov/  building  tile  are  also 
produced  mamly  in  the  Central  West.  Illinois  and  New  Jersey  lead 
in  architectm'al  terra  cotta.  In  the  production  of  fii^e  brick  Penn- 
sylvania is  the  leading  State,  having  produced  about  36  per  cent  of 
the  total  in  1916.  Following  Pennsylvania,  in  the  order  of  their 
importance,  were  Ohio,  Missouri,  Kentucky,  and  New  Jei"sey,  with 
small  amounts  in  about  a  dozen  other  States. 

There  is  not  much  information  available  as  to  the  way  in  which 
various  sections  were  hit  by  the  curtaihneut  of  production  in  the 
war  period.  The  Hudson  River  and  Raritan  (New  Jereey)  dis- 
tricts, from  which  the  supply  of  common  brick  for  Nevr  York  City 
is  largely  drawn,  appear  to  have  sufl'ered  the  greatest  decline  in 
production  m  1917  and  1918.  The  Central  West  probably  suffered 
the  least.  This  accounts  for  the  relatively  greater  rise  in  the  price 
of  bricks  aromid  New  York  and  Philadelphia  than  elsewhere.  The 
shortage  of  brick  in  this  region  pereisted  well  hito  the  year  1919. 


ecoinomics  of  the  coxstruction  industry. 


113 


Some  production  figures  on  sand-lime  brick  are  available.  This 
particular  type  of  brick  is  produced  mainly  in  the  Middle  West. 
The  figures  follow: 


1913. 
1914. 
1915. 


5, 003, 300 
6, 118, 500 
4. 484, 000 


1916 5,675,000 

1917 6, 824, 000 

1918 5, 403,  800 


The  1918  figure  is  about  21  per  cent  under  1917.  This  may  be 
t^-pical  of  the  curtailment  of  production  of  clay  products  in  the 
Middle  West. 

The  price  record. 

In  view  of  the  fact  that  the  production  of  clay  products  is  so  wide- 
spread and  that  the  markets  are,  in  the  case  of  most  of  the  products, 
strictly  local,  it  has  been  considered  advisable  to  exliibit  a  number 
of  price  series.  (See  Tables  33  to  40.)  It  is  only  in  this  manner 
that  a  comprehensive  view  of  the  price  situation  with  respect  to  these 
commodities  may  be  obtained.  The  attempt  has  been  to  secure  figures 
more  or  less  typical  of  various  sections  of  the  country  and  the  various 
]narkets. 

In  the  case  of  common  brick  it  is  readily  seen  that  the  rise  has 
been  greatest  in  eastern  markets.  This  has  been  explained  above  in 
the  statement  concerning  the  decreased  production  in  the  Hudson 
River  and  Raritan  districts. 

In  Table  39  figures  on  fire  clay  and  fire  brick  are  showTi  in 
parallel  columns  as  illustratmg  the  comparative  rise  in  a  raw  material 
and  a  finished  product.  From  these  figures  it  is  seen  that  war  con- 
ditions caused  a  rise  of  158  per  cent  in  fire  brick,  but  that  the  raw 
material  rose  even  more — 173  per  cent. 

Figures  on  two  grades  of  kaolin  are  shown  in  the  same  table  for 
comparison  with  the  figures  on  mosaic  tile.  The  kaolin  figures  are 
also  of  interest  in  comparison  with  the  figures  on  sanitary  pottery, 
shown  under  the  heading  of  plumbing  supplies  in  the  section  on 
miscellaneous  building  materials  (Section  XV). 

Table  40  gives  uidex  figures  on  various  clay  products,  as  com- 
puted from  the  various  price  series  available,  together  with  a  com- 
posite mdex  for  the  clay-products  group.  This  composite  index  is 
a  weighted  average,  the  weightmg  factors  being  based  on  the  average 
values  of  the  different  products  for  the  3^ears  1913  and  1914. 

The  mdex  on  common  brick  is  believed  to  be  typical  of  the  average 
rise  over  the  country.  At  least  the  figure  for  the  last  c{uarter  of  1918, 
showing  a  general  advance  of  92  per  cent  on  common  brick,  is  believed 
to  represent  accurately  the  general  rise  to  that  period.  In  computing 
the  other  indices  there  were  not  so  many  figures  a^-aUable  as  in  the 
121297°— 19 8 


114  ECONOMICS   OP   THE   C<JNSTRUCTION    INDUSTRY. 

case  of  brick.     As  a  whole,  the  figmcs.  icprcsciit  as  i'<<irl\-  as  ftossihln, 
the  situation  in  general. 

The  fact  llinl  vitrified  brick  showb  less  iiu;i(';i,sc  than  common 
brick  is  probal)ly  due  to  that  fact  that  the  greater  part  of  this  product 
is  manufactured  in  the  Middle  West,  where  conditions  were  less  drastic 
than  in  the  East.  The  same  explanation  probably  holds  good  for 
hollow  tile. 

Cost  of  production. 

There  is  but  little  information  available  on  production  costs  in 
these  industries.  Such  information  of  a  comprehensive  nature  would 
be  extremely  difficult  to  get. 

The  secretary  of  the  War  Service  Committee  on  Brick,  Mr.  R.  D, 
T.  HoUowell,  attributed  increased  prices  during  the  war  on  the 
product  he  represented  to  increased  ANages,  increased  cc^ts  of  raw 
material  and  fuel,  mcreased  taxes,  increased  sales  expense,  and  the 
greatly  reduced  production  in  1917  and  1918.  He  stated  that  the 
increase  in  transportation  costs  alone  would  amount,  on  the  average, 
to  about  $1  per  thousand.  In  the  same  statement  Mr.  Hollo  well  said : 
''Prices  on  brick  have  for  the  last  generation  been  notoriously  low. 
The  industry  as  a  whole  is  said  to  have  made  little  or  no  money." 

A  producer  of  brick  in  Minnesota  has  stated  that  his  1918  produc- 
tion costs  were  83  per  cent  over  the  costs  in  1913.  According  to  liis 
statement,  the  labor  cost  increased  75  per  cent;  raw  materials,  143 
per  cent;  fuel,  123  per  cent;  transportation,  24  per  cent;  other  ele- 
ments. 32  per  cent.  Another  producer,  in  Michigan,  reported  some- 
what sjualler  increases;  35  i>er  cent  in  labor  cost ;  S3  per  cent  in  traris- 
portation;  24  per  cent  in  other  elements.  As  a  whole  his  production 
costs  in  1918  were  57  per  cent  above  the  1913  figure. 

Some  producei's  of  sand-lime  brick  have  furnished  their  figures  on 
increases  of  production  costs.  Averages  made  from  these  figures  are 
as  follows: 


Item. 

1918  over 
191$. 

T.abor  cost 

Percent. 

66 

FwiCost 

13i 

Transjjortation 

9» 

Other  elements 

7S 

Total  production  ci 


In  tlie  early  part  of  1919  it  was  stated  that  brick,  hollow  tile,  and 
ceramic  tile  were  being  produced  at  from  25  to  35  per  cent  of  capacity. 
The  situation  in  the  Central  West  was  said  to  be  less  serious  than  in 
the  East.     Tlie  producers  of  these  commodities  have  claimed  that 


ECONOMICS   OF   THK    CONSTRUCTION    INDUSTEY,  115 

their  prices  were  not  liigh  in  coaiparisou  witli  other  commodiiies,  iior 
in  comparison  with  the  production  costs. 

Report  on  brick  prices  by  investigating  committee  of  the  IHinois  Stare 
Legislature. 

The  lUinois  State  Legislature  appointed  a  committee  on  material 
cost  investigation,  the  purpose  of  which  was  to  investigate  and 
report  on  prices  of  building  materials  prevailing  in  the  State  of 
Illinois.  After  an  investigation  covering  several  months  the  report 
of  the  committee  was  made  public  on  May  6,  1919.  Concerning 
common  brick  the  report  contains  the  following  statement: 

Very  exten.4ve  investigations  of  the  cost  of  the  manufacture  of  common  liuilding 
brick  were  made  by  the  commission.  We  6ul>|ectecl  manufacturers  to  the  mfi<t  iTgid 
examinations  as  to  the  cost  of  manufacture  of  the  product.  The  Ijrick  manufacturers 
furnished  the  committee  with  all  data,  books,  accounts,  reports,  and  calculations 
asked  for.  In  addition  they  furnished,  upon  request,  manufacturers'  cost  sheets  and 
audits  of  cei-tified  accountants  for  the  years  1912,  1913,  1916,  1917,  and  1918  for  the 
information  of  the  comnussion  and  for  comparative  purposes.  Estimates  of  the  cost 
of  manufacture  for  the  year  1919  were  also  submitted.  These  documents  have  been 
carefully  studied  by  the  commission.  Being  one  of  the  industries  whose  production 
was  repressed  liy  the  Government  during  the  war  for  the  purpose  of  conserving  fuel 
the  brick  industry  suffered  exceedingly  great  losses  for  the  years  1917  and  1918.  An 
examination  of  the  audits  of  the  company  made  l)y  reputable  certified  accountants  in 
the  usual  course  of  business  for  these  years  show,  l>eyond  question,  that  these  k>sse6 
were  sustained.  The  principal  elements  entering  into  the  cost  of  manufacturing  l>rick 
are  labor,  freight  and  hauling,  and  fuel.  These  items  comprise  nearly  SO  per  cent  of 
the  cost  of  manufacture.  The  year  1916  was  a  favoral>le  year  for  the  brick  induairy. 
In  1919  labor,  constituting  about  35  }ier  cent  of  the  manufacturing  cost,  has  increased 
35  per  cent  over  the  year  1916.  Freight  and  delivery  to  job,  constituting  alwut  25 
per  cent  of  the  cost  of  manufacture,  has  increased  from  1916  to  1919  about  200  per  cent 
on  freight  and  35  per  cent  for  delivery.  Fuel,  constituting  about  20  per  cent  of  the 
cost  of  manufacture,  has  been  increased  from  1916  to  1919  al)out  100  per  cent.  We 
have  been  informed  l)y  the  brick  manufacturers  that  brick  can  not  be  sold  for  le^  than 
$12  per  thousand  in  Chicago,  delivered  to  the  job,  without  depri\  ing  the  manufacturer 
of  a  reasonable  profit.  This  we  are  not  prepared  to  dispute.  It  is  obviou-^,  with  over- 
head expenses  remaining  practically  the  same  with  a  small  or  large  j^roduction,  that 
operating  at  full  cajiacity  would  insure  a  lower  price  than  would  result  if  there  was  a 
limited  production  of  brick.  The  commission  has  been  unable  to  establish,  by  e\i- 
dence,  that  any  illegal  comlnnations  exist  to  regulate  the  price  of  commt)n  building 
brick.  For  a  limited  time  during  the  war  the  Government  permitted  agrf'enieuts  of 
brick  manufacturers  to  be  made  establishing  prices.  The  agency  for  this  purp-oe, 
created  Arith  the  Government's  sanction,  has  ceased  to  exist.  The  Chicago  price  of 
$12  per  thousand  is  the  lowest  price  obtaining  anywhere  in  the  United  States.  The 
only  assurance  we  can  gi\'e  the  public  is  that,  with  practically  capariiy  production, 
there  may  be  a  slightly  lower  price  for  common  building  brick.  The  price  for  Chicagf.) 
common  building  Ijrick  was  established  In'  th<?  Federal  Trade  CouuuLs.sion  al  $12  per 
thousand.  The  Price  Fixing  Committee  of  the  War  Industries  Board,  at  a  meetin» 
held  on  February  27,  1919,  fixed  the  f<>llo\ving  prii^es  per  thousand  f.o.  h.  trucks  or 
cars  at  plant;  an  additional  charge  of  ?2  per  thousand  (o  ],o  allowed  wtiore  brick  nnt^t 
be  trucked  or  loaded  on  cars  at  nearest  railroad  siding  outside  plant: 


116  EOONOMICft   OF   THE   CONSTRUCTION   INDUSTRY.     • 

DislricI  No.  1.  -  New  England  States  and  New  York  State  north  of  Albany  and  east  of  ^fec^lanjf•.v 
villo: 

1  fai fl  hinnod $17. 50 

Lijjht  })iiincd  or  salmon 15. 50 

Except  Dufl'ney  IJrick  Co.,  Mcchanicsville,  N.  Y.: 

Hard  burned 12. 50 

Light  burned  or  salmon 10.  .50 

District  No.  3.  -State  of  New  Jersey  nortb  of  Trenton: 

Hard  burned 16.50 

Light  burned  or  salmon 14. 50 

Long  I.sland,  N.  Y.: 

Hard  biuned 13. 50 

Light  burned  or  salmon 11. 50 

District  No.  5 — Slates  of  Virginia  and  North  Carolina  East  of  Asheville:  Hard. 

Adams- Payne  &  G  leaves,  Roanoke,  Va $12. 00 

Asheville  Brick  A-  Tile  Co.,  Fletchers,  N.  C 12. 50 

Yadkin  Brick  Yard,  New  London,  N,  C 12. 50 

.\dams  Bros.,  Payne  Co.,  Lynchburg,  Va 15. 00 

Nunsemond  Brick  Corp.,  Norfolk,  Va 16. 00 

Cherokee  Brick  Co.,  Raleigh,  N.  C ; 11.  GO 

Fulton  Brick  Works,  Richmond,  Va 14. 50 

Lewis  Larson,  SulTolk,  Va.  (Sorooo  Brick  Co. ) 15. 00 

District  No.  6 — States  of  Tennessee,  North  Carolina  west  of  and  including  Asheville,  South  Carolina, 
Georgia,  P'lorida,  and  Alabama: 

W,  B.  Bush  Si  Co.,  N;vshvUle,  Teun 10.  50 

Dolores  Brick  Co.,  Molino,  Fla 10.  .50 

Shepherds  Bros.,  Columbus,  Ga 10.  .50 

Bickerstaff  Brick  Co.,  Columbus,  Ga 11. 00 

Georgia-Carolina  Brick  Co.,  Augusta,  Ga 11. 50 

Geo.  C.  Berry,  Columbus,  Ga 12. 50 

Pee  Dee  Brick  &  Tile  Co.,  Marion,  S.  C 12. 50 

Standard  Brick  Co.,  Macon,  Ga 12. 50 

Bibb  Brick  Co.,  Macon,  Ga 12. 50 

Cherokee  Brick  Co.,  Macon  Ga 12. 50 

E.xcelsior  P)rick  Co.,  Montgomery,  Ala 13. 00 

Guignard  Brick  Works,  Columbia,  S.  C 13. 00 

Carolina  Brick  Co.,  Kingston,  N.  C 15. 00 

Chatahoochee  Brick  Co.,  Atlanta,  Ga 15. 00 

Birmingham  Clay  Products  Co.,  Birmingham,  Ala 18. 00 

Southern  Clay  Mfg.  Co.,  Birmingham,  Ala 1&  00 

District  No.  S— State  of  Peimsylvania,  west  of  llarrisburg  (including  Metropolitan  Brick  Co.,  Can- 
ton, Ohio): 

Hard  bmned 16. 00 

Except  Yingling-Martin  Brick  Co.,  I'itlsburgh,  Pa.— 

Hard  burned 18. 42 

District  No.  9— States  of  Ohio,  Michigan,  West  Virginia,  and  eastern  Kentucky: 

H;ird  biu-ned 16. 00 

Light  burned  or  salmon 14. 00 

Kx-cept  Geo.  H.  Clippert  &  Son  Brick  Co.,  Detroit,  Mich,— 

Hard  burned 14. 50 

Light  burned  or  salmon 12. 50 

District  No.  10— States  of  Illinois,  Indiana,  western  Kentucky,  and  southern  Wisconsin,  including 
Madison: 

Hard  burned 15. 50 

Light  biu-ncd  or  salmon 13. 50 

District  No.  12— States  of  Mississippi,  Louisiana,  Arkansa.^,  Kansas,  and  Texas,  except  El  Vaso 
Coimty: 

Choctaw  Brick  A  Gas  Co.,  Mansfield,  Ark.,  hard  burned 15. 00 

ColTeyville  Vitrilicd  Brick  i  Tile  Co.,  Coffe>-%-iIle,  ICans.,  hard  biu-ned 12. 00 

District  No.  H— States  of  California,  Nevada,  Arizona,  New  Mexico,  and  El  Paso  County,  Tex.: 

Hard  l.uriied 1 1. 00 

District  No.  10— States  of  Mi.ssouri,  Iowa,  Neiiraska,  and  Oklahoma: 

H;ird  burned 16.50 

District  No.  IS— Chicago  district: 

Hard  burned 11.00 

Sand-lime  brick 14. 50 


ECOXOMICS    OF   THE    COXSTKUCTION    liSI^DUSTEY. 


117 


Concerning  piiving  brick  the  following  brief  statement  was  made: 

The  committee  finds  no  evidence  of  a  combination  of  paving  brick  manufacturers. 
Competition  between  the  paving  brick  and  cement  manufacturers  has  resulted  in  a 
price  for  paving  brick  at  a  point  as  low  as  paving  brick  can  be  sold  at  a  reasonable 
profit.  Three  paving  brick  manufacturers  of  this  State  have  offered  to  lease  their 
plants  to  the  State  at  an  annual  rental  of  6  per  cent  on  the  fair  cash  value  of  their  plant 
investment,  or  to  contract  their  output  to  the  State  at  actual  cost  plus  a  reasonable 
profit. 

Table  29. — Brick  soldin  the  United  States,  1S98-1918. 
[Figures  from  U.  S.  Geological  Survey.] 


PericK?. 


Average  1S9S-1907.. 

Average  1908-1912. 

1913 

1914 

1915 

191C, 

1917 


Average  190.S-1917 
1918' 


Common  brick. 


Vitrified  brick  or  block.  | 


Front  brick. 


Quan- 
tity 
(thou- 
sands). 


Value. 


Aver- 
age    Quan- 

price  ;   tity 
per    !  (thou- 

thou-  j  sands). 

sand. 


S,39S,.593S48,705,9.S(5 


8,770,990 
8, 088,  790 
7, 14(5, 571 
6,851,099 
7,394,202 
.5,864,909 

7, 920, 052 

2, 820, 000 


51, 783.  .562 
50, 134',  757 
43, 769, 524 
42, 145, 292 
49,357,411 
47,936,344 


$.5.81650,820 

5. 90  966, 081 
6. 20  958, 680 
6. 12  931, 324 
6.15,9.53,335 
6. 68  941,  .553 
8.17  706,934 


49,  22,>,  114   0. 22  932,  223  11,  474, 048 
30, 000, 000  10. 65  400, 000  8, 000, 000 


Value. 


•?6, 298, 707 

10, 993, 809 
12, 138, 221 
12, 500, 866 
12,  230, 899 
12, 2:36, 890 
10, 664, 5tX) 


Aver- 
age      Quan- 

price  I     tity 
per       (thou- 

tnou-  I  sands). 

sand,  i 


$9.CS 

11.38 
12. 66 
13.42 
12.  a3 


450, 527 

727, 484 
827, 665 
810, 395 
a55. 668 


13.001,002,762 
15. 09     757, 618 


12.31 
19.70 


789, 1.53 
400,000 


Value. 


S5,  .552,  791 

8, 668, 410 
9, 614, 138 
9, 289, 623 
9, 535, 5.36 
11,464,614 
10, 391, 368 

9, 363,  733 

8,000,000 


Aver- 
are 
price 
per 
thou- 
sand. 


S12. 16 

11.92 
11.62 
11.46 
11.14 
11.43 
13.72 

11.87 

20.00 


'  Figures  roughly  estimated. 
Table  "iO.—Clag  products  sold  in  the  United  States,  189S-1918. 
[Figures  from  U.  S.  Geological  Survey.] 


Com- 
mon 
brick. 

Vitri- 
fied 
brick. 

Front 
brick. 

Fancy  or  orna- 
mental brick. 

Enameled  brick. 

Fire  brick. 

Period. 

Per 

cent 

of 

total. 

Per 
cent 

of 
total. 

Per 
cent 

of 
total. 

Value. 

Per 
cent 

of 
total. 

Value. 

Per 
cent 

of 
total. 

Value. 

Per 
cent 

of 
total. 

Average  1898-1907 

Average  190S-1912 

39.6 

32.2 
27.6 
26.5 
25.8 
23.8 
19.3 

27.3 

13.6 

5.1 

6.8 
.6.7 
7.6 
7.5 
5.9 
4.3 

6.5 

3.0 

4.5 

5.4 
5.3 
5.6 
.5.8 
0.5 
4.2 

5.3 

3.0 

S332,  2.57 

203, 103 
109, 703 
124, 459 
109,  425 
109, 072 
192,072 

166,025 

0.3 

.1 
.1 
.1 
.1 

:1 

.1 

S531, 111 

910, 634 
l,225,7as 
1,075,026 
835, 808 
827,443 
889,899 

940, 705 

400,000 

0.4 

.<) 
.  7 
.6 
.  5 
.4 
.4 

.  5 

.2 

•511,352,  .506 

15,876,140 
20,027,122 
1.;,  427, 547 
1S,,S:?9,931 
30, 806, 129 
58, 012,  264 

22, 409, 369 

70,000,000 

9.2 
9.8 

1913 

11.4 

1914 

10.0 

1915 

11.5 

1916 

14.9 

1917 

23.4 

Average  1908-1917 

12.7 

I'JIS' 

100, 000           . 0 

31.7 

»  Figures  roughly  estimated. 


lis 


HCONOMICS   or    THK    CON'STKUCTION    INDUSTRY. 


T.A.K1.1:  :'.l    -''Iw/  pro&arU  snhl  in  the  Unit'''!  Stairs,  IS'^S-lOl^. 
[  Figuies  f roin  tlio  ('.  S.  'Jeological  Survey.) 


1 

stove  lining,  j       Drain  tile. 

1 

Sewer  i>\\n:. 

-Vrrhlteetaral 
terra  cotta. 

Hollow  buildijaii 

tile  and  firo- 

proofiug. 

Period. 

Value. 

Per 

cent 

of 

total. 

Value. 

Per 

cent 
ot 

total 

Value. 

Per 

cent 

of 

total 

Per 

Value,      -f 

total 

t 

\alue. 

S3,0»l,818 

5,11.5,932 
8, 620. 216 
8, 385,  .337 
7,800,938 
9,042,912 
13, 253, 433 

7,358,450 

10.000.000 

Per 

cent 
of 

total. 

Average  1898-1907.. 

Average  1908-1912.. 
1913 

$564,223 

517,671 
635,667 
520,  .=85 
459,341 
601,776 

0.5 

.3 
.3 
.3 
.3 
.3 
.2 

.3 

$4,566,921 

9. 137.  J05 
8,5.'.8.320 

.3.7 

.5.7 
4.7 

$7,851,351 

11,271,409 
14.872.10;3 
14,014,767 
11,259,349 
13,577,00«l 
17,307,211 

12. 738. 748 

15,000.000 

Ci.  3 

7.0 
8.2 
8.5 
6.9 
6.5 
6.0 

7.2 

6.8 

$3,888,741       3.1 

6,  180.  800       4.  0 
7,7:33.306       4.3 
6. 087. 652       3.  7 
4,706.062       2.9 
6.  466. 336       S.  1 
6,173,5.30       2.5 

6,366,091       3.6 

! 

3.000.000       1.4 

2.5 

3.2 
4.7 

1914    

8,  .522, 039,      5.2 
8,879,264';      5.4 
10.033,617       4.0 
11,008,163       4.4 

9.273.845       5.1 

10,000,000i       4.5 

5  1 

1915 

4H 

1916        

4.fi 

1917 

Average  1908-1917.. 
1018 ' : 

619,882 
532,561 

5.3 
4.2 
4.5 

'  Figures  roughly  estimated. 

Table  ?>2.—CIai/  products  sold  in  the  United  States,  189S-191S. 

[Figures  from  the  I'.  S.  Geological  Survey.] 


Tile,  not  drain. 


Period. 


Value. 


Average  1898-1907 ....  ,$3, 122, 553 


Average  1908-1912... 

1913 

1914 

1915 

1916 

1917 


Average,  1908-1917. 


5,115,213 
6, 109, 180 
5.  705, 583 
5.186,055 
6,475,464 
6,821,221 

5, 587,357 


Per 

cent 
of 

total 


Z.2 
3.4 
3.5 
3.2 
3.1 
2.7 


1918' 5, 000,  coo- 


Miscellaneous. 


Total  hncl; 
and  tile. 


.$3,488,256 

2.663,915 
3,018,316 
3,165,814 
3.716,944 
7,094.149 
8.588,879 


3,890,368,      2.2 
6,500.000 


Per 

cent 

of 

total 


2.8 

1. 

1. 

1.9 

2.3 

3.4 

3.5 


Value. 


$99,230,953 


738.001 

296, 757 
588. 822 
704.841 
042. 849 
860,846 


139,327.413 
166.000.000 


Per 
cent 

of 
total 


80.5 

80.0 

70.1 

78.6 

77.0 

76. 

77.2 


Potter  v. 


Value. 


!  Per 

i  cent 

of 

I  total 


$23,832,693     19.5 


32. 198. 489 
37.902.37,51 
a5, 398, 161 
37, 325, 3S8 
48.217,242. 
56, 162, 522; 


20.0 
2l>.  0 
21.4 
23.0 
2;?.  3 
22 


37,608.809     21.3 
55,000,00*     24.9 


Total. 


$123, 06:?,  646 

160,936,431 
181,289,152 
164,936,93? 
103,120.2:12 
207.260,091 
24S,023,30S 

176,936,222 

221.000,009 


'  1918  figures  rougtily  estimated. 


ECOXOMICS   OY   THE    COXSTEUCTIOls^   INDUSTBY. 


119 


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ECONOMKJS    OF    THE    CONSTRUCTION    INDUSTIIY. 


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ECOXOMICS    OF    THE    COXSTRUCTIOlSr    INDUSTRY. 


121 


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122 


ECONOMICS   OF   THK   CONSTRUCTIOX   INDUSTBY. 


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EC0>70MICs    OF    THE    CO^^STKU<  TIOX    IXX»USTR¥. 


123 


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124 


ECONOMICS   OF   THE    COXttTRUCTlOX    IXDUSTLY. 


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.Tiilv  1,  1913,  to  June  30,  1914 

1913 

1914 

c- 

c 

ECONOMICS   OF   THE   COXSTRUCTIOX   INDUSTRY. 


125 


5'§ 


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126  KCOXO.MIC.S   OF   THE    CO N'STU LECTION    INDUSTUZ. 

Table  40. — Jielative  jmce.^oft^iiious  clai/ proo'vci;. 


.Tulv  1,  1913,  to  June  30,  1914 

1913 

1911 

191."i 

1916 

1917 .• 

1918 

1917: 

P'irsl  quarlor 

Second  quarter 

Thiid  quarter 

Fourth  quarter 

1918: 

First  quarter 

Second  quarter 

Third  quarter 

Fourth  quarter 

1919: 

First  quarter 

April 


Coramodily. 


C;om- 
nion 
brick. 


100 
100 
98 
96 
111 
137 
172 


12S 
13f. 
141 
146 


154 
lol 
ISO 
192 


199 
194 


\"itri- 

fiod 
l)rick. 


103 
98 
100 
116 
l.-l 


10.5 
113 
117 
129 


140 
144 
L56 
164 


166 
161 


Front 
In'iclc. 


100 

101 

102 

105 

106 

133  J 

1 


119 
138 
138 
13S 


i:>4 
105 
192 
202  i 


202 
202 


Fire 
brick. 


Hollow 
tile. 


100 

99 
100 
101 
121 
195 
246 


IS-i 
210 
218 

218 


2:35 
242 
247 

258 


100 
100 
100 
93 
118 
1.5.5 
177 


l.^S 
151 
1(W) 
167 


172 
171 
1S3 
IS-t 


ISO 
175 


Drain 
tile. 


10(J 
UIO 
100 
100 
129 
143 
193 


U3 
143 
143 
143 


ir>3 

1<I3 
1:^3 


Sewer 

1)11)0. 


100 
99 
98 
98 
116 
139 
172 


131 
i:$6 
146 

in 


170 
17^ 
175 


175 
170 


Ce- 
ramic 
tile. 


100 
100 
100 
101 
122 
1.56 
189 


137 
14.5 
170 
170 


1^.7 
ls9 
200 

2>M) 


Com- 
^io8ite 
index. 


10i> 

:M 

'H 
111 
14»i 

IW 


147 
15* 
156 


170 

i7r 

190 
197 


2«1 

195 


SECTION  X.  QUARRY  PRODUCTS. 
General  remarks  on  the  stone  industry. 

To  quote  the  United  States  Geological  Survey: 

Stone  has  suffered  competition  for  several  years  past  from  various  types  of  cheaper 
structural  materials,  and  a  large  number  of  owners  of  small  quarries  have  closed  their 
works  on  accoui\t  of  lack  of  demand,  stone  having  been  replaced  by  concrete  and  brick. 
The  demand  for  the  more  expensive  grades  of  building  stone  has  continued  fairly 
regular,  and  the  decrease  caused  by  the  closing  of  quarries  furnishing  the  cheaper 
stone  has  been  offset  in  the  grand  total  by  the  increase  in  the  output  of  crushed  stone, 
which  at  one  time  was  considered  only  a  by-product. 

The  stone  industry  is  influenced  largely  by  local  demand.  Construction  such  aa 
sea  walls,  river  improvement  work,  construction  of  roads  and  reserv-oirs,  etc.,  and 
other  similar  structui'al  work  may  call  for  the  opening  of  a  quarry  in  riv>  \  •'•i:nty  of 
the  work,  to  be  abandoned  as  soon  as  this  work  is  completed. 

Production  figures  on  stone  of  all  kinds. 

Table  41  gives  the  production  figures  on  stone  produced  and  sold 
in  the  United  States,  classifietl  according  to  kinds.  Table  42  gives 
production  figures  for  stone  classified  according  to  uses. 

From  the  first  table  it  is  seen  that  granite  and  limestone  are  the 
most  important;  and,  also,  that  limestone  has  grown  in  importance 
more  than  the  other  kinds.  Granite  reached  its  peak  of  production 
in  the  3-ear  1913,  A\hich  was  the  maximum  year  for  stone  of  all  kinds, 
v.hile  limestone  increased  up  to  and  including  the  year  1917.  For 
the  decade  189S-1907  granite  represented  20  per  cent  of  the  total 
stone  produced  and  limestone  40  per  cent.  In  1917  granite  was  19 
per  cent  of  the  total  and  limestone  was  56  per  cent.  Limestone  was 
the  only  kind  that  was  greater  in  total  value  in  1917  than  in  1913. 


ECOXOMICS   OF   THE   CONSTRUCTION   INDUSTRY.  1'2T 

The  second  tabic  shows  tliat  the  most  unportaiit  form  in  which 
stone  is  used  is  crushed  stoue.  Orubhe^l  stoue  is  considered  along 
with  sand  and  gravel  in  Section  XII,  on  mineral  ciggregate,  and  will 
jiot  be  treated  in  detail  in  this  section. 

Second  in  importance  to  crushed  stone,  in  normal  years,  is  build- 
ing stone.  This  group,  however,  was  overshadowed  l>y  that  under 
the  heading  of  "Others"  in  1916  and  1917.  The  latter  group  in- 
cludes the  limestone  used  in  important  metallurgical  and  chemical 
industries  and  as  pulverized  stone  for  agriculture;  rough  trap  rock 
sold  to  paving  cutters  and  crushing  plants,  marble  used  for  flux^ 
terrazzo,  marble  dust,  etc. 

Pavmg  stone,  curbing,  flagging,  rubble,  and  riprap  have  all  de- 
creased continuously  from  1913.  Monumental  stone  increased 
somewhat  in  total  value  in  1917,  but  probably  did  not  mcrease  in 
quantity. 

Production  figures  on  building  stone. 

Table  43  gives  figures  on  the  production  of  building  stx)neby  kinds. 
This  shows  markt^d  decreases  in  ail  kinds,  from  1913  to  1917;  but 
limestone  shows  less  decrease  than  the  others. 

The  building  stone  produced  in  1913  was  about  4  per  cent  less  in 
value  than  in  1912.  The  1914  figure  indicates  a  decrease  of  1§  per 
cent  from  the  1913  figure,  which  shows  that  the  total  production  of 
building  stone  in  1914  was  not  greatly  affected  by  the  general  busi- 
ness depression.  Marble  was  the  only  kind  of  stone  to  show  an  in- 
crease in  production  for  building  purposes  in  1914. 

The  general  depression  which  began  m  1914  did  not  exert  any 
severe  effect  on  the  building  stone  industry  until  1915,  in  which 
year  the  total  value  was  nearly  IS  per  cent  under  the  previous  year. 
During  the  first  half  of  1915  many  important  quarries  were  idle. 

Although  building  activity  was  very  great  in  1916,  there  was  not 
a  large  proportion  of  stone  buildings.  Limestone  was  the  only 
kind  of  stone  showing  an  increase;  the  total  value  of  building  stone 
decreased  2^  per  cent  from  1915. 

The  output  for  1917  decreased  30  per  cent  in  quantity  and  17  per 
cent  in  value  from  1916.  Estimates  for  the  year  191S  indicate  a 
decrease  from  1917  of  59  per  cent  in  quantity  and  44  per  cent  in 
value. 

Exports  and  imports  of  stone. 

In  the  year  1913  the  total  stone,  including  marble,  exported  from 
the  United  States  was  valued  at  $1,856,892,  or  2.2  per  cent  of  tho 
total  value  of  stone  produced.     This  was  the  record  j'ear  in  exports. 

In  the  same  year  imports  amounted  to  .$1,606,135.  Most  of  tho 
stone  imported  is  marble  and  onyx.  About  85  per  cent  of  the 
marble  imported  in  ordinary  times  comes  from  Italy. 


128  ECONOMICS   OF   THE   COXSTRUCTION    INDUSTRY. 

These  flguros  on  exports  and  irn])orts  arc  so  small  in  comparison 
with  domestic  production,  that  it  is  readily  seen  that  they  would 
scarcely  affect  the  domestic  markets. 

Conditions  in  Great  Britain. 

The  following  is  quoted  from  the  United  States  Geological  Survey: 

The  British  mineral  .stalLstirs  for  1010  are  interesting  as  an  index  of  v.-hat  may 
happen  to  our  own  mineral  industry,  the  United  States  having  entered  the  war  under 
conditioas  similar  to  those  of  Great  Britain — that  is,  both  were  essentially  nonmili- 
tary  nations — and  both  were  obliged  to  withdraw  from  peaceful  pureuits  a  large  per- 
centage of  the  working  population.  Unfortunately,  the  mineral  industry  of  Croat 
Britain  is  far  less  diverse  than  that  of  the  United  States,  and  in  the  produftion  of 
metalliferous  minerals  is  relatively  unimportant,  except  for  iron  ore. 

The  noteworthy  feature  of  the  British  statistics  is  theii*  exhibition  of  how  the  pro- 
duction of  the  essentials  has  been  fairly  well  maintained,  while  the  nonessentials 
have  fallen  off  to  a  much  larger  extent.  Thus,  comparing  the  figiues  for  1913  with 
those  of  1916,  we  find  that  in  the  former  year  there  was  a  production  of  287,430,47.3 
tons  of  coal,  15,997,328  tons  of  iron  ore,  and  3,280,143  tons  of  oil  shale.  In  1916  coal 
production  had  declined  to  256,375,366  tons,  iron  ore  to  13,494,658  tons,  and  oil  shale 
to  3,009,232  tons.  Turning  now  to  nonessentials,  if  we  may  be  permitted  thus  to 
characterize  the  rocks,  we  find  that  gravel  and  sand  declined  fi'om  2,409,152  tons  to 
1,961,650  tons.  Igneous  rock  declined  from  7,098,493  tons  to  4,843,176  tons.  Lime- 
stone declined  from  12,740,664  tons  to  10,541.573  tons.  Sandstone  declined  from 
3,977,303  tons  to  1,999,308  tons.  If  our  interpretation  be  correct,  the  decline  in  the 
production  of  sand  and  rock  reflects  curtailment  in  domestic  building  operation-S, 
things  not  immediately  necessary  having  manifestly  been  postponed.  On  the  other 
hand,  attention  has  been  concentrated  on  the  production  of  coal  and  iron,  which  are 
indispensable,  and  their  output  has  been  pretty  well  maintained. 

Production  figures  on  slate. 

Table  44  gives  figures  for  production  of  slate  in  the  United  States 
from  1908  to  1918,  inclusive. 

Production  of  roofing  slate  is  seen  to  have  undergone  something 
of  a  decline  during  the  years  preceding  the  war.  This  is  undoubtedly 
due  to  the  severe  competition  of  cheaper  kinds  of  roofing  material. 
In  quantity  roofing  slate  in  1913  was  about  6  per  cent  under  the 
average  for  1908-1912;  in  1917  it  was  32  per  cent  under  the  average 
for  1908-1912.  The  quantity  produced  in  1918  was  69  per  cent 
under  the  1908-1912  average,  and  46  per  cent  under  the  figure  for 
1917. 

On  the  other  hand,  mill  stock,  which  includes  slate  used  for  struc- 
tural purposes  and  in  connection  with  electrical  work,  during  the 
years  1913-1917  averaged  5,502,208  scj[uare  feet,  or  an  increase  of 
about  4  per  cent  over  the  preceding  five-3'ear  period.  TLie  quantity 
of  mill  stock  produced  in  1918  was  12  per  cent  under  the  figure  for 
1917. 

The  decreases  in  1917  and  1918  are  to  be  attributed  to  the  lessened 
demand  occasioned  by  the  inactivity  in  building.  Slate  is  not  used 
extensively  in  liastily  constructed  buildings,  such  as  a  large  per- 
centage of  the  new  buildinjrs  were  in  1917  and  1918. 


ECOXOMICS    OF   THE    COXSTEUCTIOX    INDUSTRY.  129 

Imports  of  slate  are  quite  insignificant.  Total  exports  in  1916 
amounted  to  $81,282,  which  was  H  Per  cent  of  the  value  of  the  do- 
mestic production  for  that  year.  In  1917  exports  amounted  to 
$231,703,  or  4  per  cent  of  the  total  domestic  production  of  the  year. 
The  principal  increase  was  in  slates  of  the  mill-stock  group. 

Production  figores  on  lime. 

Table  45  shows  figures  on  building  lime  and  on  all  lime  produced 
in  the  United  States.  Lime  reached  its  maximum  production  in  1916, 
in  building  lime  as  well  as  in  the  other  kinds. 

The  total  for  1917  was  7  per  cent  under  1916  in  quantity,  and  28^ 
per  cent  over  1916  in  value;  the  total  for  1918  was  20  per  cent  under 
1917  in  quantity,  and  1.7  per  cent  over  1917  in  value. 

Building  lime  in  1917  was  13  per  cent  under  1916  in  quantity  and 
10  per  cent  over  1916  in  value;  in  1918,  according  to  the  estimated 
figures,  it  was  31|  per  cent  under  1917  in  quantity  and  18  per  cent 
under  1917  in  value. 

In  1913  building  lime  was  38  per  cent  of  the  total  lime  produced; 
in  1916,  37  per  cent;  in  1917,  34  per  cent;  and  in  1918  a  little  under 
30  per  cent. 

Other  purposes  than  building  for  which  lime  is  used  are  in  chemical 
works,  paper  mills,  sugar  factories,  tanneries,  in  fluxing,  and  in  agri- 
culture.    War  demands  caused  increased  sales  of  chemical  lime. 

The  explanation  for  the  decreased  production  lies  in  the  general 
curtailment  of  building  operations  following  the  spring  of  1917, 
together  with  difficulties  in  securing  lal>or  and  transportation.  Some 
plants  that  supply  only  building  lime  were  closed  throughout  the 
year  1918. 

Imports  and  exports  of  lime  are  quite  insignificant  in  quantity  and 
value  as  compared  with  the  total  domestic  production. 

Regional  production  of  stone. 

All  the  States  produce  some  stone.  Tlie  ranking  States,  in  the 
order  of  their  importance,  are  Pennsylvania,  Ohio,  A^ermont,  New 
York,  and  Indiana. 

Of  the  States  and  Territories  listed  in  reports  of  the  I'nited  States 
Geological  Survey  on  stone  for  the  year  1917,  16  States  east  of  the 
Mississippi  showed  increases  in  value  of  output  and  11  showed  de- 
creases; in  the  territory  west  of  the  Mississippi,  8  States  showed  an 
increase,  and  11  showed  a  decrease. 

The  most  important  States  in  the  production  of  granite  were,  in 
1916,  Vermont,  Massachusetts,  North  Carolina,  California,  Wisconsin, 
New  Hampshire,  Maine,  and  Minnesota.  Nineteen  other  States  pro- 
duce granite. 

321 297°— 19 9 


180 


ECOXOMK^S   OF   THE   COKSTRUCTION   INDUSTRY. 


Sixteen  States  produced  basalt  and  related  rocks  (trap  rock)  in 
1916.  Of  those  the  most  important  were  New  Jtrsey,  Pennsylvania, 
New  York,  California,  Connecticut,  and  Washington. 

In  1916  marble  was  produced  in  19  States  and  Temtories,  Ibe 
most  important  of  which  were:  V^ermont,  Tennessee,  Georgia,  Alaska, 
Colorado,  and  New  York. 

Tliii'ty-eiglit  States  produced  sandstone  in  1916.  Of  these,  the 
tlu'ee  leading  States,  Pennsylvania,  Ohio,  and  New  Y''ork,  furnished 
together  59  per  cent  of  the  total. 

In  the  same  year  45  States  are  reported  as  producers  of  limestone, 
the  leading  ones  being:  Pennsylvania,  Ohio,  Indiana,  Illinois,  New 
York,  and  Michigan. 

Detailed  statistics  for  1918  are  not  available  for  inclusion  in  this 
report.  However,  some  figures  are  available  on  Indiana  oolitic 
limestone  m  the  Bedford-Bloomiugton  district,  as  follows: 


Year. 

Value  of 
output. 

1 

1 

Year. 

Valu»  of 
.oiitinit. 

1913 

$3,179,347 
2,718,609 
3,018,171 

1916 

1917 

1918 

S-3,4s<>,5.:5 

1914 

191.5 

.3.S*4,IM 

l.C«l.  ••^t 

-        1 

These  figures  are  given  because  the  product  of  this  district  lias 
grown  to  be  of  such  importance  in  the  construction  of  the  better 
types  of  buildings.  The  decrease  in  1918  was  42  per  cent  as  compared 
with  1917,  the  total  value  of  output  m  1918  being  the  lowest  reported 
shice  1904.  About  93  per  cent  of  the  19 IS  figure  represents  build- 
ing stone.  The  large  decrease  in  production  was  due  to  railroad 
embargoes,  scarcity  of  labor,  and  curtailment  of  building  activities. 

Regional  production  of  slate. 

In  1916,  of  the  total  value  of  the  output  of  slate,  Pennsylvania 
produced  58.7  per  cent;  in  1917,  57.7  per  cent.  In  1916,  Vermont 
produced  30.1  per  cent  of  the  total  value  of  the  output:  in  1917,  32.5 
per  cent.  Virgmia  produced  3.1  per  cent  of  the  total  in  1916,  and 
2.4  per  cent  of  the  total  in  1917. 

Figures  on  regional  production  for  1918  are  not  available.  How- 
ever, early  in  1919  one  Pennsylvania  producer  reported  his  quarries 
as  working  at  20  per  cent  of  capacity,  and  another  at  75  per  cent  of 
capacity.  At  the  same  time  a  Vermont  producer  reported  that  his 
plant  was  operating  at  about  30  per  cent  of  capacity. 

Regional  production  of  lime. 

The  production  of  lime  is  fairly  widespread,  42  States  and  Territo- 
ries being  listed  by  the  United  States  Geological  Survey  in  1916.  In 
that  j^ear  the  most  important  producing  States  were  Pennsylvania, 
Ohio,  Virginia,  West  Mrginia,  Wisconsin,  and  Missouri. 


ECOKOMICS   OF   THE    CONSTRUCTION    INDUSTRY.  131 

In  1918  the  total  quantity  of  lime  produced  was  20  per  cent  less 
than  in  1917.     Production  figures  by  districts  for  tlie  years  1917  aud 
1918  are  shown  in  Table  46. 
The  price  record. 

Tables  47  to  50  attached  give  the  record  of  prices  for  the  yeara 
1913-1919  on  building  and  monumental  granite;  on  flagging,  curbing, 
and  paving  blocks;  on  limestone  and  slate;  and  on  building  lime. 

The  figures  in  the  last  column  of  Table  50  are  composite  index 
figures  on  building  lime,  wliich  are  supposed  to  represent  a  fair 
average  of  the  general  rise  of  this  product  throughout  the  country. 
In  computing  these  figures  the  average  annual  prices  as  published 
by  the  United  States  Geological  Survey  have  been  combined  witli 
averages  of  the  indices  obtained  from  the  Price  Section  of  the  War 
Industries  Board.  These  figures  show  for  the  last  quarter  of  1918  a 
general  advance  of  97  per  cent  over  the  prewar  figure  for  building  lime. 

The  figures  in  Table  51  are  presented  as  representative  indices  of 
the  rise  in  the  various  kinds  of  building  stone.  Those  on  limestone, 
granite,  and  marble  are  the  ones  chosen  as  representative  figures  by 
the  Price  Section  of  the  War  Industries  Board.  The  figures  on  build- 
ing slate  are  simple  averages  of  the  tliree  series  of  indices  in  Table 
49.  The  final  series  on  all  building  stone  is  a  weighted  average  of 
the  indices  on  limestone,  granite,  marble,  and  slate. 

The  figm-e  for  the  last  quarter  of  1918  indicates  a  general  rise  of 
64  per  cent  on  this  class  of  materials  during  the  war  period,  an 
increase  which  is  small  in  comparison  with  other  building  materials, 
as  well  as  in  comparison  with  commodities  other  than  building 
materials. 

In  most  cases  the  prices  recorded  have  been  f.  o.  b.  point  of  origin. 
These  index  figures  do  not  take  into  account  increases  in  the  cost  of 
transportation. 

Cost  of  prodwction  in  the  building  limestone  industry. 

The  foregoing  figures  show  that  the  building-stone  industry  was 
very  seriously  curtailed  during  the  war.  In  response  to  the  lessened 
demand,  production  decreased.  Prices  rose  considerably,  but  rather 
less  than  the  prices  of  most  other  building  materials. 

Early  in  1919  it  was  stated  by  a  representative  of  the  industry 
that  prices  were  not  due  to  drop.  Increased  prices  were  ascribed  to 
increases  in  the  cost  of  labor,  fuel,  raw  materials,  and  transportation. 

An  important  producer  of  Indiana  limestone  has  stated  that 
during  the  war  wages  in  the  industiy  increased  in  amounts  ranging 
from  33^  to  120  per  cent  according  to  the  different  grades  of  labor,  the 
average  increase  for  all  labor  being  55  per  cent. 

The  same  producer  stated  that  the  cost  of  steel,  delivered  at 
his  plant,  increased  340  per  cent,  fuel  220  per  cent,  and  transportation 
from  30  per  cent  in  some  cases  to  500  per  cent  in  others. 


132 


IICOXO.MICS    (IF    TIIK    ('OXSTIirCTIO.V    IXIU'STRY. 


Fij^iiics   on   wagos   of  stonecutters   have  been   furnished   to    this 
division.     Thoy  are  as  follows: 

Wafjes  of  stonecuUcrs  in  Indiana. 


Vi;ir. 

Waijp.s 
per  hour. 

lii.lox. 

Year. 

Waces 
per  hnur. 

Iridcx. 

J808                          

$0. 35 
..iO 

.5(>J 

fi2 
89 

19H 

$0.60 

.r.7i 
.  75 

108 

190S 

191') 

111 

1909 

1917 

120 

1913                       

100 

1918 

133 

a  Sliding  scale,  $0.50,  $0.56'„  $0,621. 

Wages  of  other  classes  of  labor  in   the  building-stone  industry 
have  been  presented  as  follows: 

Ilourhj  icufjes  ui  the  buildin'j-slone  industry  in  Indiana. 


Classififatifn. 

November, 
191(1. 

November, 
1918. 

Increase. 

P]an»smen 

$0.  35 

.30 

071. 

as' 

.32i 
.30 
.24 

$0. 62i 
.39 
.37 
.27 

.  »;2.i. 
.  39' 
.34 

Pir  cen' . 
79 

Traveler  runnel's .                        

30 

Sa«'yers 

35 

Laborers 

50 

Blacksmiths 

92 

30 

Rock  breakers 

42 

Average  increase 

51 

Figures  from  stone  producers  in  the  northern  Ohio  district  indi- 
cate an  average  wage  increase  of  42  per  cent  for  1918  over  1913;  and 
an  average  increase  in  total  cost  of  production  of  40  per  cent.  The 
figures  in  the  price  tables  show  a  smaller  rise  in  ]) rices  in  this  district 
than  elsewhere. 

Cost  of  production  in  the  marble  industry. 

An  important  producer  of  marl^le  in  the  State  of  Georgia  has 
stated  that  from  1913  to  1918  wages  increased  70  per  cent;  fuel, 
110  per  cent;  transportation,  25  per  cent;  and  other  elements,  150 
per  cent;  the  increase  in  total  production  cost  was  84  per  cent. 
Labor  increased  from  40  per  cent  of  this  manufacturer  s  total 
production  cost  m  1913  to  60  per  cent  of  the  total  in  1918. 

Another  large  producer  of  marble  in  the  State  of  Missouri  stated 
in  March,  1919,  that  business  in  his  section  had  suffered  somewhat 
less  than  in  the  region  east  of  the  Mississippi  River.  He  stated  that 
wages  of  common  labor  had  increased  about  40  per  cent  from  1913 
to  1918  and  skilled  labor  about  30  per  cent;  fuel  cost  mcreased 
92  per  cent.  On  the  whole,  this  manufacturer  s  production  cost 
increased  about  28  per  cent. 

Cost  of  production  in  the  slate  industry. 

No  detailed  figm-es  are  at  hand  concernmg  production  cost  in  the 
slate  industry.     Increased  prices  have  been  attributed  by  producers 


ECONOMICS    OF   THE    CONSTRUCTIOX    INDUSTRY. 


133 


in  Vermont  and  in  Pennsylvania  to  wage  increases,  increase  in  fuel 
costs,  and  increases  in  transportation  rates.  One  Pennsylvania 
producer  lias  stated  tliat  wages  in  his  district  increased  75  per  cent. 

Table  41. —  Vabic  of  the  different  linds  of  stone  produced  uwl  sold  in  the  United  /States 

1898-19 18. 

[Figures  from  U.  S.  Geological  Survey.] 


Period. 

Granite. 

Basalt  and 
related 

rocks  (trap 
rock;. 

Sandstone. 

Marble. 

Limestone. 

Total. 

Average  1SS8-1907 

§14,714,466 

19,792,235 
20,7:33,217 
20, 160, 730 
17,864,4.39 
17,4.56,838 
15,544,957 

19,072,136 

£2,476,228 

6, 033.  .516 
9, 134, 494 
7, 865, 998 
8, 489. 222 
7,666.297 
7,570,885 

7,089,448 

18,623,829 

7,631,809 
7, 248, 965 
7,501,808 
6,095,800 
o,  603,  778 
5,512,421 

7,012,182 

85,612,897 

7,321,7.56 
7,870,890 
8,121,412 
6. 916, 025 
7,033,171 
6,330,387 

7,288,066 

§20,614,153 

32,996.699 
38,  745, 429 
33,894,155 
35.229,866 
41, 309,  .599 
46,263,379 

36, 012,  .592 

•S52,041,574 

73,776,014 
83,  732, 995 
77,544.103 
74,595,352 
79,069,63 
"82,215,671 

70,003,787 

t- 63,000,000 

Average  1908-1912 

1913 

1914 

1915 

1916 

1917 

Average  1908-1917 

1918 

1                                          1 

"  Includes  -?99:3,612  for  miscellaneous  quarry  products. 

i>  Very  roughly  estimated  by  Division  of  Public  Works  and  Construction  I^evelopment 

Table  42. —  Vcdnf  e>f  stone  sold  from  1913  to  1918,  hi/  kinds  and  uses. 
[Figures  from  U.  S.  Geological  Survey.] 


Year. 

Bulldimr 
(roughi  and 
dressed;. 

Monumental 

(rough  and 

dressed,!. 

raving. 

Ciu-bing. 

Flagging. 

1913 

§18,097,219 

17, 796,  ,5,52 
1.5,380,448 
14,677.808 
12, 102, 914 
6,  750, 000 

$7,212,648 
7.150,293 
6. 459, 439 
7,372,620 
8, 102, 493 

$3,936,448 

3, 772, 383 
3,018,382 
2,  730, 861 
2.732,434 

$2,077,919 

1,869,676 
1,654,764 
1.611,001 
1,402,980 

$573,638 
.594  9i0 

1914 

1915 

500  732 

1916 

409  605 

1917 

356,327 

1918  a 

... 

Year. 

Rubble. 

Riprap. 

Crushed. 

Other. 

Total. 

1913 

$1,. 588.  714 

1,256,213 

1,094,445 

■  825, 330 

864,321 

S4, 204. 857 
3, 736, 432 
4,193,672 
3,635,167 
2,208,373 

$31,677,871 
30,161,766 
29,173,488 
29,462,5,52 
29,065,509 
32,843,000 

$14,363,681 
11,2.59,818 
13.089,982 
18,344,5.52 
25,380,320 

$83, 732, 995 

J9M                             

77,544,103 
74,595,352 
79, 069, 683 

1915 

1916 

1917 

82, 215, 671 

1918  a 

63,000,000 

a  Figures  for  1918  eslimated. 

Table  43. — Building  stone — Value  of  granite,  trap  roek,  sandstone,  limestone  and 
marble  {rough  and  dressed)  used/or  building,  1913-1918. 

[Figures  from  the  U.  S.  Geological  Survey  Reports.] 


Kinds.                  j         1913 

1914 

1915         '         19ir.         '          1917 

1918 

$6,662,428 

6.S,690 

1,874,299 

4,509,339 

4,982,403 

$6,481,091 

45, 134 

1,825,179 

3, 896,  8.54 

5. 548  294 

$4,702,627       ?4, 305, 517 

52,307               (■)4,277 

1,416,842         1,316,287 

4,056,201          4,570,703 

o4,8(;4,471      «  4,744,1,06 

$3,  Kil,  294 

39,200 

1, 043,  226 

4,115,366 

a  3,  702,  .5(3 

41,265 

Trap  rock 

Limestone    . . 

Miscellaneous . . . 

Total 

18, 097, 219       17.  796. 552 

15,092,448  [     15,001,390 

12,102,914 

b  0, 750, 000 

'       ' 

a  Marble  for  exterior  building  only. 


h  Estimated. 


r.u 


KCOXO.M  HS    OK    TDK    COXSTItl'CTIOX    IXDU&TRY. 


T.vui.K  -14.     SIdtr  unld  ',„  Ihc  L'nitid  States,  IDOS-UflS. 
[Figures  from  U.  S.  Geological  Survey.] 


Year. 


Average  1908-1912 

1913 

1914 

1915 

1916 

1917 

1918 


Roofiiig  slate. 


Number 

ofM)iuiifs      Y.i.„ 
(lOOsiliiurel     ^  •"'"'• 
feci).      ' 


1,209,894 
1,113,944 
1,010, 5.->3 
9ti7,SS0 
88.5, 873 
70:5, 667 
377,417 


$4,682,033 
4,461,0<)2 
4,lf,(),832 
3,  7  Hi,  334 
3,  408, 934 
3,411,740 
2, 198, 179 


Average 
price  per 
square 


S3. 86 
4.00 
4.08 
3.87 
4.08 
4.85 
5.82 


Mill  stock. 


Qtiantity 

(siiuare 
feet). 


5,319,610 
6,312,011 
5,361,925 
4,. 576, 112 
5, 782, 842 
5,47,S,  l.-.l 
4,841,133 


Value. 


S941,86t) 
1,233,838 
977, 930 
819, 672 
1,177,260 
1,277,249 
1,498,264 


.Average 

price  per 

square 

foot. 


SO. 176 

.195 

.182 

.179 

.20 

.23 

.309 


Other 

uses 

(value). 


Total, 
valua. 


$329,360 

480, 576 

568, 025 

392, 9f)9 

a  752, 643 

nl,0<.>0,9T7 

6  600,000 


S.5,95.3,3« 
6, 175, 17ti 
5,700,737 
4,9r>s,915 
5.;>i8,'ii7 
5.749,'>W 
4,29(j,4W 


n  Includes,  in  1916,  4.990,007  school  slates,  valued  at  ?52,561.  and  3,182,159  .square  feet  of  Macklvwrd 
material,  valued  at  $403,502;  in  1917,  4,378,490 school  slates,  valued  at  $48,828,  and  2,650,563  squuie  feet  of 
bicK^kboard  material,  valued  at  $413, l(a. 

b  Figures  for  "Other  uses"  roughly  estimated  by  Division  of  Public  Works  and  C'onstructiuu  Develop- 
ment. 

Table  4.5. — Lime  burned  and  sold  in  the  United  Slates,  190S-191S. 
[Figures  from  U.  S.  Geological  Survey.) 


Building  lime 

1 

Total  lime. 

Year. 

Quantity  i 
(short      1     Value." 
tons). 

Average 

price     , 
per  toil. 

Quantity 
(short 
tons). 

Value.a 

Average 

price 
per  ton. 

Average  1908-1912 

3,336,036 
3,  395, 390 
3,380,928 
3,622,810 
4, 073, 433 
3,786,364 
3,028,000 

813,3-36,893 
14,i;4S,3tj2 
13,2t«,9;iS 
14,424.0:}o 
IS, 509;  305 
23,807,877 
24,224,000 

$4.0i) 

1913 

1,358,099 
1,103,433 
1,149,733 
1,509;  908 
1,313,597 
900,000 

$6,011,856 
5,0(18,375 
4,89(S990 
7,8.59,614 
8,713,845 
7,160,000 

$4.43 
4.36 
4.26 
5.21 

6.63 
7.% 

4.07 

1914 

3.92 

1915 

S.iH 

1916 

4.54 

1917     

6.29 

1918  6 

S.M 

a  Vivlue  given  represents  the  value  of  bulk  lime  f.  o.  b.  at  point  of  shipment  and  does  not  include  weight 
or  co-t  of  b.'.nel  or  p;ickage. 
6  Figiues  for  1918  estimated. 

T.\Bi.E  4(>. — Production  of  lime  of  all  hinds  in  1911  and  191S,  by  districts. 

(Short  tons.] 


District. 


New  England  States  and  narrow  area  east  of  Hudson  River  in 
New  York 

All  of  New  Yorkwest  of  Hudson  River 

K.islcra  Pennsylvania,  New  Jersev,  and  Maryland 

Western  Pennsylvania  and  West  V  irginia. . .". 

\"  irginia,  N  orth  Carolina,  and  South  Carolina 

Ohio 

Michisau 

Illinois,  lit  li;;na,  and  Missouri 

Iowa,  Mimiooli  Montana,  South  iJakota,  and  Wisconsin. , 

Tennessee  and  Kcntuekj- 

t ; eor'.;ia,  Alabama,  and  Florida 

Arkansas.  Colorado,  Kansas,  Nebraska,  Oklahoma,  and  Wyo- 
ming  

Texas  and  New  Mexico ""!!!!! 

Arizona,  California,  Idaho,  Nevi\da,  Oregon,  U»ah,'and"Was&- 
inst  on 

Unilistr  ibnted 

Total 


Total, 
1917. 


394, 
85, 
816, 
502, 
307, 
479, 
135, 
436, 
206, 
102. 
66, 


27.082 
52,742 


144,976 

25, 328 


3,786,3tH 


Total, 

lyis. 


314.360 
70,410 
704, 250 
346, 270 
255;  880 
350, 570 
.133,410 
379, 820 
133, 520 
119,300 
49,730 

15,700 
44, 710 

92,700 

17,250 


3,028,000 


Decrease 


mcrease 

(-). 


I'cr  anf. 
-20 
-18 
-13 
-39 
-15 
-27 
-  2 
-13 
-35 
+  15 
-38 

-M 

-14 


-2t) 


ecoxo:mics  of  the  coxstructiox  ixdustry. 


135 


T.VBLE  47. — Prices  on  <iu(irnj  products. 
[F.  o.  b.  quarry  prices.    Quotations  from  price  section,  ^Va^  Industries  Board.] 


Commoditv 


Granite 
l)uilding, 
red,  white, 
and  blue. 


Granite 
liiiilding, 
light  bkie. 


Granite, 

dark 

monumental. 


Granite, 
monumental, 
red  and  gray. 


M:irli:et 


United 

States. 


Middle 
West. 


United  States 
and  Canada. 


United 
States. 


I'eriod. 


Price 

per 

cul>ic 

foot. 


Rela- 
tive 
price. 


Price 

per 

citbic 

foot. 


Rela- 
tive 
price. 


Price 

per 

cubic 

foot. 


Rela- 
tive 
price. 


Price 

per 

culiic 

foot. 


Rela- 
tive 
price. 


Average  Julv  1,  1913  to  .Tune  30,  1914. 

1913 

1914 

1915 

1916 

1917 

191S 


191 


Fir.st  quarter. . . 
Second  quarter. 
Third  quarter.. 
Fourth  quarter. 


1918: 


First  quarter. . . 
Second  quarter. 
Third  quarter. . 
Fourth  fiuarler. 


SO.  6500 
.C.500 
.0500 
.7000 
.7500 
.8000 
.9000 


.8000 

.8000 

..sooo 

.8000 


.9000 
.9000 
.9000 
.9000 


100 
100 
100 
108 
115 
123 
1.38 


123 
12:i 
123 
123 


138 
138 
138 
138 


SO.  5000 
.5000 
.5000 
.5000 
..5.500 
.6000 
.6700 


.6000 
.6000 
.6(X)0 
.6000 


.6000 
.6400 
.7200 
.7200 


TOO 
100 
100 
100 
110 
120 
134 


120 
120 
120 
120 


120 

128 
144 
144 


SI.  3500 
1.  3-1.58 
1.3500 
1. 3.508 
1.  4208 
1.  5250 
1. 9458 


1.  4.500 
1.  4;-33 
1.  5.500 
1. 6167 


1.  7333 

1.  9000 

2.  0500 
2.1000 


100 
99 
100 
100 
105 
113 
144 


107 
110 
115 
119 


128 
141 
152 
156 


?1. 1200 
1.  1200 
1.  1200 
1.  2033 
1.  2100 
1.3750 
2. 0650 


1.2.500 
1.2.500 
1.  5000 
1. 5000 


1.7500 
2.0700 
2. 1900 
2.2500 


100 
100 
100 
107 
lOS 
123 
184 


\n 

112 
134 
134 


1.5« 
1S.5 

201 


Table  48. — Prices  on  quarry  products. 

[Market  prices.     First  four  series  from  price  section,  War  Industries  Board;last  two  scries  from  the  Engi- 
neering News- Record.] 


Stone  flag- 

Stone curt)- 

ing,  4  Inches 

thick  and 

imder. 

Granite 

pav- 

Granite  pav- 
ing blocks, 
4  inches,  and 
1-mch  blocks, 
7  inches  to 
10  inches  long, 
4  inches  to  41 
inches  wide. 

Paving 
stone 
basalt 
block 
4  by  7  by  8 
inches. 

Paving 

stone 

5  inches, 

dressed. 

ging,  sawed. 

ing  blocKs. 

Market 

Cleveland, 
Ohio. 

Cleveland, 
Ohio. 

New  Bedford, 
Mass. 

Chicago, 
Kansas  City,    San  Fran- 
Cleveland,         Cisco. 
Detroit. 

New 
York. 

Period. 

Price 

per 

cubic 

foot. 

Rela- 
tive 
price. 

Price 

per 

cubic 

foot. 

Rela- 
tive 
price. 

Price 
per  M. 

Rela- 
tive 
price. 

Price 

per 

square 

yard. 

Per 
sqiiare 
yai-d. 

Average  July  1,  1913, 

to  June  30,  1914 

1913 

«0.;5600 
.3600 
.3600 
.3600 
.3700 
.4000 

100 
100 
100 
100 
103 
\\\ 

SO.  3000 
.3000 
.  30OO 
.3000 
.3400 
.4000 
.5.375 

.4000 
.4000 
.4000 
.4000 

..5000 
..5.500 
.5500 
.5500 

100 
100 
100 
100 
113 
133 
179 

133 
133 
133 
133 

166 
183 
183 
183 

840.0000 
40.0000 
40. 0000 
41.. 5000 
41.5000 
50.0000 
50.0000 

50.0000 
50. 01)00 
50.  0000 
60.0000 

50.0000 
50.  0000 
50. 0000 
50.0000 

100 
100 
100 
104 
104 
125 
125 

125 
125 
125 
125 

125 
125 
125 
125 

$2.0300 
2. 0900 
1.9700 
1.9200 
1.9200 
2.0800 
2.1300 

2.0800 
2.0800 
2.0800 
2.0800 

2.1300 
2.1300 
2. 1300 
2. 1300 

100 
102 

1914 

97 
95 
95 
102 
105 

102 
102 
102 
102 

105 
10.5 
105 
105 

1915 

1916. 

$57.60 
57.75 
57.75 

57.75 
57.75 
57.75 
57.75 

57.75 
57. 75 
57.75 
57.75 

57.  75 
57.75 

$2.37 

1917. 

2.48 

1918 

.5875  '     IRi 

2.70 

1917: 

First  quarter 

Second  quarter... 

Third  quarter 

Fourth  quarter. . . 

1918: 

First  quarter 

Second  quarter. . . 

Thirdqnarter 

Fourth  quarter. . . 

1919: 

.4000 
.4<M)0 
.  4000 
.401)0 

.5000 
.  55(X) 
.  6500 
.  (i500 

111 
111 
111 
111 

139 
1.53 
181 
181 

2.40 
2.50 
2.50 
2.50 

2.50 
2.70 
2.80 
2.80 

2.  SO 

\  iiril                              ! 

1 

1 

]  :i() 


K(X)NOMICS    f)F   THE    CONSTRUCTION    INDUSTRY. 


'Patu.!':  '19. — Prices  on  qiinrnj  proihirls. 
[Quotations  from  price  section,  War  Industries  Board.] 


CdinitKxlily . 


Market. 


Tcriod. 


A  vorage  July  1, 191.3,  to  Jimc  30, 

1914 

iyi:j 

1911 : 

191.") 

1916 

1917 

1918 


191T: 


First  quarter 

Seeoiui  quarter 

Third  quarter 

P'oujth  quarter 


191S: 


First  quarter. . . 
Second  quarter. 
Thii-d  quarter.. 
Fourth  quaiter. 


Indiana 

building 

limestone, 

buff. 


United 

States. 


Price 

per 

cubic 

foot. 


SO.  2500 
.  2o00 
.  2.500 
.  2.J00 
.  2625 
.3.383 
.4208 


.  3500 
.3.")00 
.3500 
.3.S33 


.4000 
.4000 
.4000 
.4S33 


Rela- 
tive 
price. 


100 
100 
100 
100 
105 
143 
168 


140 
140 
140 
153 


160 
160 
160 
197 


nin'ldinK 
stone,  griiy 
bluck^toue. 


Cleveland, 
Ohio. 


T'ricc 

per 

cubic 

foot. 


$0. 34.50 
.34.50 
.3200 
.3200 
.  3275 
.37.50 
.  4250 


.3.500 
.  3.500 
.4000 
.4000 


.4000 
.  4000 
.4.500 
.4500 


Rela- 
tive 
price. 


100 
100 
92 
92 
95 
109 
123 


101 
101 

lit) 
lit; 


iiii 

116 
130 
130 


Slate,  green 

roofing,  No.  1 

grades  20  by  10 

inches. 


United 

States. 


Price 

per 

100 

square 

feet. 


$4.7708 
4.6250 
4.89.58 
5.  00(K) 

5.  2083 

6.  5000 

7.  .3833 


6.0000 
6.  ■.USi 
6.  6667 
7. 0000 


7.0000 
7.  :i3:i3 
8. 0000 
8.0000 


Rela- 
tive 
price. 


100 
97 
103 
105 
109 

159 


126 
133 
110 
147 


147 
151 

168 
108 


Plate,  ril), 
structural, 
1  inch  Itiick. 


T'nited 
States. 


Price 

per 

square 

foot. 


.  1369 
.  126)9 
.1310 
.1112 
.  1396 
.1741 
.  2399 


.1700 
,  16;)4 
.1730 
.  1.S42 


.19.53 
.2100 
.  29.55 
.  2.589 


Rela- 
tive 
price, 


100 
93 
96 
81 
101 
127 
173 


124 
124 
123 
1.35 


i;3 

1.51 
21) 
ISJ 


."^late.  blue 
blackboard, 
§  iuch  thick. 


United 
States. 


Price 

per 

square 

foot. 


$0. 1384 
.1290 
.1415 
.U4.S 
.1306 
.  1.543 
.1605 


.1.530 
.1488 
.1.597 
.1555 


.li;41 
.  15S3 
.  1.597 
.1597 


Table  50. —  M^holesale  prices  on  buildin^j  liinc. 
[Quotations  from  price  section.  War  Industries  Board.] 


Commodity. 


Adam.s  lime,  com- 
mon or  masonry. 


Lime  in  bulk. 


Lime,  eastern 
common,  standard 


BuiMing 
lime. 


Market . 


Xew  England, 

New  York,  and 

New  Jersey. 


Chicago. 


New  York. 


L^nited 
States. 


Period. 


Price 
ixjr  barrel 

280 

pound 

ner. 


Avora-e,  July  1,  1913, to  June  30, 

1914 

1913 

1914 

1915 

191fi 

1917 

1918 


1917 


First  quarter . . . 
Pi'Cund  qiiiirter. 
Tliird  quarter... 
Fourth  quarter . 


1918: 


First  quarfer... 
Second  quarter . 
Third  quarter . . 
Fourth  quarter . 


SO. 9658 
.  950O 
1.  0133 
1.01,50 
1. 1083 
1.  4290 
1.9258 


1.3.300 
1. 3300 
1.  4883 
1. 5675 


1. 6467 
1.8.842 
2.0425 
2.1300 


1919: 


First  quarter . 
Apiil 


Rela- 
tive 
price. 


Price 

per  short 

ton. 


100 
98 
105 
108 
115 
M8 
199 


1.38 
138 
154 
162 


171 
195 
211 
221 


$4. 3750 
4.38:33 
4.0000 

3.  5(XX) 

4.  608:5 
6. 1667 
7.2500 


5.7000 
5.9667 
6.5000 
6.5000 


6.5000 
7.5000 
7.  50i)0 
7.5000 


6  9.0000 
6  9.0000 


Rela- 
tive 
price. 


Price 

per  barrel 

300 

pounds 

net. 


100 
100 
91 
80 
105 
111 
166 


130 
136 
149 
149 


149 
171 
171 
171 


206 
206 


$1.2500 


1.2500 
1.2396 
1. 4050 
1.7604 
2.2948 


1.5917 
1. 6.500 
1.9000 
1.9000 


L9625 
2.1500 
2.5000 
2.5667 


2.7000 
2.7000 


Rela- 
tive 
price. 


Com- 
posite 
index,  a 


100 
99 
112 
141 
184 


127 
132 
152 
152 


157 
172 

200 
205 


216 
216 


100 
101 
99 
97 
108 
151 
181 


139 
142 
160 
163 


157 
177 
192 
197 


6  211 
6  211 


o  Figures  computed  from  all  figures  available. 


6  Estimated. 


ECONOMICS    OF   THE    CONSTRUCTION    INDUSTRY. 


137 


Table  51.^ — Composite  index  /inures. 
[Base:  Average  for  year  July  1,  1913,  to  June  30,  19M.] 


Period . 


BuiHing 
lini'> 
stone.a 


Buildinc: 
granite. a 


Building 
marble. a 


Building 
slate. b' 


All 
building 
stone. & 


1913 . 
1914. 
1915. 
1916. 
1917. 
1918. 

1917: 


First  qutirlcr  . . . 
Second  quarter  . 
Third  quarter.  . 
Fourth  quarter. 


1918: 


First  quarter. . . 
Second  quarter . 
Third  quarter. . 
Fourih  quarter. 


100 
100 
100 
105 
1-13 
lOS 


140 
140 
140 
153 


160 
160 
160 
193 


100 
100 
110 
110 
120 
134 


120 
120 
120 
120 


120 

128 
144 

14! 


100 
100 
100 
110 
117 
137 


117 
117 
117 

117 


137 
137 

i:'.7 
137 


95 
99 
93 
105 
131 
167 


125 
128 
133 
141 


145 
1.54 

l'J2 
179 


100 

100 
107 
127 
154 


125 
126 
128 
133 


135 
140 
159 
164 


1919: 


First  quarter. 


a  Figines  of  price  section,  War  Industries  Board. 

b  Figui-es  computed  by  IJivision  of  Public  Works  and  Construction  Pevelopment. 

SECTION  XI.  PORTLAND  CEMENT. 
Introduction. 

The  growth  of  the  Portland  cement  industry  in  the  United  States 
since  the  year  1870  is  very  well  indicated  by  the  production  figures 
given  below.  The  average  mill  price  per  barrel  for  each  period  is 
given  also.  These  figures  show  that  the  increased  production  was 
accompanied  by  a  decrease  in  prices.  The  general  decrease  in 
prices  is  probably  largely  responsible  for  the  greatly  increased  use 
of  cement  in  all  kinds  of  construction.  The  production  figures 
follow : 

Porilund  cement  in  (he  United  States.a 


Period. 

Quantity 
(barrels). 

Average 

price  per 

barrel. 

Period. 

Quantity 
(barrels). 

Average 

price  per 

barrel. 

1870  1879 

82,000 

1,477,000 

17, 282, 834 

333,832,412 

$3.00 

1.98 

1.60 

.99 

1910 

76,549,951 
78,.528,(i37 
82, 438, 096 

$0. 891 

1880-1889 

1911 

.844 

1890-1899 

1912 

.813 

1900-1909 

a  Figures  from  the  U.  S.  Geological  Survey. 

Natural  and  puzzolan  cements  have  decreased  in  importance  in 
this  country  until,  at  the  present  time,  they  are  insignificant  as 
compared  with  Portland  cement.  In  1880  the  production  of  natural 
cement  amounted  to  2,030,943  barrels,  the  average  value  being  85 
cents  per  barrel.  In  that  year  the  Portland  cement  produced 
amounted  to  42,000  barrels,  with  an  average  value  of  $3.     In  1917 


138  KCOXD.MKS    OF    THi;    COXSTKUCTION    INDUSTRY. 

jiaturiil  iiiid  (>u/,z()laii  cements  coinl)ined  amounted  to  639,450 
bairols,  or  less  than  1  per  cent  of  the  amount  of  Porthind  cement  pro- 
duced in  that  ^ear.  The  av^erage  value  oi"  natural  and  puzzolau 
cements  in  1917  was  68  cents  per  barrel. 

In  the  year  1900  imports  of  cement  amounted  to  about  14  per  cent 
of  the  domestic  production  of  cements  of  all  kinds.  In  1910  the 
imports  amounted  to  about  one-half  of  1  per  cent  of  the  domestic 
production,  and  since  1910  the  imports  have  been  so  small  as  to  be 
practically  negligible. 

Exports  oJ"  Portland  cement  in  1900  amounted  to  a  little  over  1 
per  cent  of  the  total  quantity  produced.  In  1917  thc}^  amounted  to 
2.8  per  cent  of  the  total  cjuantity  produced.  While  the  amount  of 
exports  has  grown  somewhat,  still  the  export  trade  is  not  yet  sufTi- 
ciently  large  to  materially  affect  prices  of  Portland  cement  in  the 
A mcrican  markets. 

Portland  cement  produced  in  the  United  States,  1913-1918. 

Table  52  gives  the  figures  on  production,  value,  and  average 
price  per  barrel  of  Portland  cement  by  years  from  1913  to  1918. 
These  figures  show  that  production  in  1918  was  11  per  cent  under 
the  average  for  the  preceding  10  years  and  23  per  cent  under  the 
figure  for  the  year  1917. 

The  stocks  on  hand  at  the  mills  at  the  close  of  the  year  1918 
amounted  to  10,594,000  barrels,  w^hich  is  practically  the  same  as  the 
a%'erage  figure  for  the  preceding  five  yeai's.  Consequenth',  the 
decrease  in  consumption  amounted  to  practically  the  same  as  the 
decrease  in  production. 

The  decline  in  production  in  1918  varied  in  different  sections  of 
tlic  country.  In  New  England  the  decrease  from  1917  was  about  25 
per  cent,  in  the  Middle  Atlantic  States  about  18  per  cent.  In  the 
Southern  States  east  of  the  Mississippi  the  production  was  practi- 
cally the  same  as  in  1917.  In  the  Central  West  production  dechned 
28  per  cent;  in  Louisiana  and  Arkansas,  9  per  cent;  in  the  Northwest, 
30  per  cent;  in  the  Southwest,  21  per  cent;  in  the  Eocky  Mountain 
States,  30  per  cent;  and  on  the  Pacific  coast,  about  21  per  cent.^ 

The  fact  that  a  high  level  of  production  was  maintained  in  the 
Southern  States  in  1918  was  probably  due  to  the  demands  for  various 
kinds  of  construction  work  for  the  Government. 

Mil!  prices  on  Portland  cement. 

As  has  been  pointed  out,  Portland  cement  declined  from  $3  per 
barrel  in  1880  to  81  cents  per  barrel  in  1912.  During  this  period 
practically  all  other  materials  advanced  in  price.  Tlie  decline  in 
cement  prices  has  been  largely  due  to  the  development  of  large- 
scale  production  with  improved  methods. 

I  These  statemeuts  are  based  on  figures  fiiniished  by  the  Portbud  Cement  Association. 


ECOXOMICS    OF    THE    COXSTItUCTlOX    INDUSTRY.  139 

The  production  table  (Table  52)  gives  the  yearly  average  price  per 
barrel.  These  figures  are  based  on  net  prices  f.  o.  b.  plants.  They 
give  the  most  representative  figures  for  the  country  as  a  whole. 

The  1918  average  price,  $1.59  per  barrel,  was  the  highest  yearly- 
average  recorded  since  1898. 

Table  53  gives  price  figures  of  the  United  States  Geological  Survey 
by  districts.  Index  figui'es  based  on  these  prices  have  been  com- 
puted. The  average  for  the  years  1913  and  1914  has  been  taken  as 
the  base,  in  order  to  make  these  index  figures  comparable  with  those 
furnished  by  the  price  section  of  the  War  Industries  Board,  for  which 
the  average  for  the  year  previous  to  July,  1914.  has  been  taken  as 
the  base. 

This  table  shows  a  relatively  greater  increase  in  the  eastern  part  of 
the  United  States  than  in  the  West,  although  actual  prices  have 
continued  higher  in  the  West  than  in  the  East. 

The  averages  of  the  index  figures  for  districts  I,  2,  3,  4,  and  6  are 
given  for  the  pm-pose  of  comparison  with  the  average  figures  of 
the  price  section  of  the  War  Industries  Board  for  the  Eastern  and 
Middle  Western  States.  These  figures  are  seen  to  be  in  ver\-  close 
agreement. 

This  average  for  the  Eastern  and  Middle  Western  States  has  been 
chosen  by  the  price  section  of  the  War  Industries  Board  as  tvpical  of 
the  whole  country.  The  index  figures  are  shown  to  be  in  close 
agreement  with  the  averages  for  the  whole  country,  as  obtained 
from  the  figures  of  the  Geological  Survey. 

Table  54  gives  quoted  prices  and  index  numbers  from  figures  of 
the  price  section  of  the  War  Industries  Board.  One  price  series  on 
natural  cement  is  included.     These  are  f .  o.  b.  plant  prices. 

Prices  for  the  first  quarter  of  1919  have  been,  in  general,  the  same 
as  for  the  last  quarter  of  1918.  Reductions  in  the  net  price  (i.  e.,  not 
includmg  the  charge  for  sacks,  which  is  refunded  when  the  sacks 
have  been  returned)  of  15  cents  per  l>arrel  in  the  East,  10  cents  per 
barrel  in  the  region  suri'ounduig  Pittsburgh,  and  5  cents  per  baiTel 
in  the  region  contiguous  to  Chicago,  were  made  in  the  month  of  April. 

Market  prices  on  Portland  cement. 

Table  55  gives  market  prices  on  cement.  One  series  of  mill  prices 
is  mcluded  also. 

In  taking  prices  from  trade  journals  some  confusion  is  apt  to  arise 
as  between  v/holesale  prices  (carload  lots  to  dealers)  and  retad  prices 
(dealers'  prices  delivered  on  the  job).  It  has  been  considered  advis- 
able in  this  report  to  give  only  wholesale  prices. 

Most  cement  is  sold  in  cloth  sacks,  four  to  the  barrel.  Tlio  market 
quotations  usually  include  a  charge  for  the  sacks,  the  amoimt  of  this 
charge  being  refunded  when  the  sacks  are  returned  to  the  mill.     Ou 


140 


KPONOMICS    OF   THE    CONSTRUCTION    INDUSTRY. 


tlie  average  the  consumer  loses  about  onc-ciglilh  of  tlic  bag  refund, 
owing  to  loss  and  damage  of  the  bags.  It  has  been  considered  best 
to  report  in  these  tables  net  prices  (i.  e.,  with  the  bag  refund  deducted 
from  the  quoted  prices). 

In  most  markets  the  bag  charge  was  40  cents  per  barrel  up  to 
September,  1918;  from  September,  1918,  to  March,  1919,  inclusive, 
it  was  SI  per  barrel;  and  in  April,  1919,  it  was  reduced  to  GO  cents. 

Government  control. 

In  1918  the  fuel  supply  of  the  cement  mills  was  restricted  to  75 
per  cent  of  normal  by  the  Fuel  Administration. 

Cement  prices  to  be  paid  by  the  Government  on  Government 
orders  were  fixed  by  the  price-fixing  committee  of  the  War  Industries 
Board  in  1917  for  the  remainder  of  that  year  and  the  first  four  months 
of  1918.  They  were  again  fixed  on  May  4,  1918,  and  on  August  23, 
1918,  for  the  remainder  of  the  year.  The  August  23  schedule  gave 
the  same  net  prices  as  the  May  4  schedule.  These  price  schedules 
did  not  hold  for  private  purchasers. 

The  prices  (per  barrel,  exclusive  of  packages'*  adopted  by  the 
price-fixing  conmiittee  are  given  belov/ : 


Place. 


Hudson,  N.  Y 

Lehigh  Valley,  Pa.. 

Pittsburgi),  Pa 

Northampton,  Pa... 

Universal,  Pa 

FordNvick,  Va 

Klngsport,  Term 

Richard  City,  Tenn. 

BcUevue,  Mich 

Mitchell,  Ind , 

Buffm?:ton,  Ind 

La  Salle,  111 , 

StecUou,  Minn 

M;tson  City,  Iowa 

HiumiI)al,"Mo 

lola,  Kaiis 

HaiTys,  Tex , 

Ilouston,  Tex 

San  Antonio,  Tex... 

El  Paso,  Tex 

New  Orleans,  La 


1917  and 

first  4 

months, 

1318. 


Last  8 

months, 

191S. 


SI.  So 


1.75 
1.75 
1.70 
1.65 
1.05 
1.80 
1.70 
1.00 
1.70 
1.70 
1.70 
1.70 
1.75 
1.70 
.L.'iO 
1.95 
1.95 


i'b.ce. 


Portland,  Colo 

Trident,  Mont 

Devil's  Slide,  Utali . . . 

Brigham,  Utah 

Salt  Lake  City,  Utah. 

Irvin,  M'ash 

Concrete,  Wash 

Se;ittle,  Wash 

Tacoma,  Wash 

Portland,  Oreg 

Oswego,  Oreg 

Stockton,  Calif 

OakLand,  Calif 

San  Francisco,  Calif... 

Santa  Cruz,  Calif 

Santa  Barbara,  Calif. . 

Los  Angeles,  Calif 

Cement,  Calif 

Davenport,  Calif 

Crestmore,  Calif 


1917  and 
fir.-t4 

mviit^s, 
1918. 


Last  S 

months, 

1918. 


SI.  70 
1.70 


1.70 


l.'JO 
1.70 
1.70 


1.70 
1.70 
1.70 
1.70 
1.70 
1.70 


SI.  7.5 
1.90 
1.90 
1.90 
1.90 
1.95 
L95 


2.00 


1.95 
1.95 
1.95 


Cost  of  production. 

It  has  been  stated  that  the  prices  of  May  4,  191S,  were  fixed  after 
considerable  investigation  by  the  Federal  Trade  Commission.  In 
arguing  for  a  higher  price  the  War  Service  Committee  of  the  cement 
industry  maintained  that  manufacturers  of  cement  w^ere  operating 
at  three-fourths  normal  capacity  and,  that,  consequently,  the  over- 
head costs  were  relatively  greater  than  in  times  of  normal  production. 
They  further  stressed  the  increased  labor  and  fuel  costs.  The  indus- 
try apparently  adopted  a  policy  of  protecting  all  its  members,  so 


ECONOMICS    OF   THE    CONSTRUCTION    INDUSTRY.  141 

that  the  prices  were  fixed  at  a  high  enough  figure  for  all  producers 
to  operate. 

In  the  month  of  March,  1919,  a  producer  in  Michigan  stated  that 
prices  would  come  down  when  the  cost  of  labor  and  fuel  lessened. 
At  the  same  time  a  California  firm  stated  that  its  prices  had  not 
increased  as  much  as  its  production  costs,  claiming  that  wages  had 
increased  75  per  cent  in  the  past  two  3T-ars.  A  Missouri  producer 
claimed  to  have  lost  money  every  month  since  August,  1918.  A 
Texas  producer  stated  that  prices  were  not  due  to  drop,  owing  to 
high  prices  of  commodities  in  general,  high  wages,  and  high  cost  of 
fuel  and  supplies. 

The  price  concessions  in  April,  1919,  may  have  been  made  in  antici- 
pation of  increased  production,  which  would  lower  the  relative 
amount  of  overhead  charges.  The  cost  of  fuel  had  declined  somewhat 
at  that  time. 

On  the  whole,  the  cement  industry  has  steadfastly  maintained  its 
inability  to  make  large  concessions  on  prices. 

Concerning  cement,  the  report  of  the  investigatuig  committee  of 
the  Illinois  State  Legislature,  published  May  6,  1919,  contained  the 
following  statements: 

The  commission  encountered  grave  difficulties  in  investigating  the  cost  of  manu- 
facturing cement.  The  Lehigh  Cement  Co.,  operating  14  cement  plants  throughout 
the  country,  through  its  Aace  president,  stated  that  the  actual  cost  of  manufacturing 
cement  per  barrel  v/as  $1 .44(j6  in  1918  and  $0.(5253  in  1913 ;  that  the  profit  per  barrel  in 
1918  was  $0,111  and  in  1013  was  SO. 1967;  that  the  profit  on  invested  capital  in  1918 
was  5.92  per  cent  and  in  1913  was  11. (>6  per  cent.  This  company  offered  to  submit 
all  of  its  cost  sheets  and  audits  to  any  reliable  certified  accountant  apptointed  by  the 
commission.  The  records  of  this  company  are  kept  at  Allentown,  Pa.,  and  it 
would  require  several  months  to  make  an  examination  to  ascertain  the  cost  of  produc- 
tion of  cement  for  the  years  named  in  the  resolution.  It  took  representatives  of  the 
Federal  Trade  Commission  three  months  to  examine  the  books  of  this  company.  An 
Illinois  cement  company  presented  its  cost  sheets  and  audits  for  the  year  1918.  It 
also  furnished  the  conmiission  with  its  monthly  reports  for  the  year  1918,  sworn  to, 
and  being  exact  copies  of  the  same  reports  furnished  to  the  War  Industries  Board, 
These  reports  contain  an  itemization  of  the  elements  of  production  cost  of  cement, 
stating  the  total  cost  of  the  respective  items,  and  the  cost  of  each  item  per  barrel. 

The  table  is  as  follows: 

Actual  cost  of  plant  operating  at  4,000  barrels,  year  191S. 

Summary-: 

Total  number  of  men 333 

Which  equals  12  barrels  cement  per  man  employed. 

Mill  superintendence  and  labor  (including  power  labor) $0.  2594 

Quarry  labor 1085 

.3679 

Quarry: 

Labor  for  raw  materials,  including  shale 1085 

Dynamite 0510 

Power  and  operation  material 0223 

.  1818 


142  ECONO.MKS    OF   THE    CONSTRUCTION   INDUSTRY. 

Manufacturing  cost  \nT  liurrt-l,  iucUiding  packmfi: 

Raw  material $0.  1818 

KupcriutciKk'nce  and  mill  lalxir 2534 

l'"uel  for diviuif ". 0033 

Kiln  fuel .  :  . 2201 

P<  )wer  coal 1342 

(rypsum 0299 

Ki'jKiirs  and  incidentals 0920 

Oil  and  Avast.* 0007 

Deprociation 1  l-i9 

1.0413 

Administration  and  o-s'orhead  expenses: 

Executive  ollicers  (^including  general  officers) 1246 

Insurance 0175 

Selling 079S 

Taxes 00:1-5 

Interest 0137 

Legal 0044 

Spec,  mine  expense 0599 

Rock  depletion -• 0092 

Commissions 0205 

Package  expense 02^6 

Discounts 0348 

Allowances 00^*6 

Consignment  expense 0045 

Interest,  §4,000, 000,  at  7  per  cent 2126 

.  6245 

Total  manufacturing,  including  packing  and  administration —     1.  6658 

Freight  rates  on  cement. 

The  rate  table  (Table  50)  gives  some  representative  rates  on  cement 
together  with  percentages  of  increase.  The  increase  of  freight  rates 
accounts  for  the  rehitively  greater  increase  in  market  prices  than  iu 
f.  o.  b.  plant  prices. 

Talle  52. — Portland  cement  produced  in  the  United  States. 


Year. 


Average,  190S-1912.. 

1013 

1914 

191") 

1916 

1917 


Average,  1013-1917 
191S. . . 


Quantity 
(barrels). 


70, 716,.  145 

92,097,1S1 
S8, 230, 170 
So, 914, 907 
91,521, 19S 
92,S14,202 

;Ki.  ll'i,.522 

-!.6.32,000 


Vaiue.o 


59,575,515  SO.  S43 


92,-557.617 
S1,7S9;36S 
73.  SS6. S20 
100,947.*S1 
125,670,429 

94, 970. 423 

6113,S94.S«> 


Average 

price  MT 

tiarrel. 


1.005 
.927 
.831 
l.Wi 
1.354 

1.054 

1.59 


a  Values  btised  on  soiling  price  olcemeut  in  bulk  at  the  mills, iucluding  cost  of  labor  aud  packing,  but  Q;)t 
tlio  value  of  the  sacks  or  barrels. 
i>  Kslimatcd. 


ECONOMICS   OF   THE   CONSTRUCTION   INDUSTRY. 


143 


Table  53. — Mill  prices  on  Portland  cement,  hij  districts. 
[Average  prices  per  barrel  f.  o.  b.  plant,    (Quotations  fiom  U.  S.  Geological  Survey.] 


District 

1.  Lehigh 
Distiict  (east- 
ern Pennsyl- 
vania and 
western  New 
Jersey. 

2.  New  York 
State. 

3.  Ohio  and 
western  Peim- 

4.  Michigan 
and  north- 

5.  Southern 
Indiana  and 

sylvania. 

Indiana. 

Keuiucky. 

Period . 

Price 

per 

barrel. 

Rela- 
tive 
price. 

Pi-ice 

per 

barrel. 

Rela- 
tive 
price. 

Price 

per 

barrel. 

Rela- 
tive 
price. 

Price 

per 

barrel. 

Rela- 
tive 
price. 

Price 

per 

barrel. 

Rela- 
tive 
price. 

Average,  1913  1914 

1913. 

SO.  824 

.838 
.809 
.699 
.944 
1.220 
1.532 

100 

102 
98 
85 
115 
148 
186 

SO.  925 

.934 

.917 

.766 

1.027 

1.304 

1.616 

100 

101 
99 
83 
111 
141 
175 

10. 938 

1.000 

.876 

.3.55 

1.113 

1..382 

1.500 

100 

107 
93 
91 
119 
147 
160 

$0,995 

1.030 
.960 
.944 
1.168 
1.427 
1. 6.55 

100 

103 
97 
95 
117 
143 
166 

$0. 802 

1.008 
.717 
.703 
1.106 
1.352 
1.598 

100 
117 

1914 

83 

1915. 

81 

1916.                                    .     .. 

128 

157 

1918. 

185 

District 

6.  Illinois 
and  north- 
western 
Indiana. 

7.  Maryland, 

^'il•ginla,  and 

West 

Virginia. 

8.  Tennes.see, 

Alabama^  and 

Georgia. 

9.  Iowa, 

Mi.ssouri,  and 

Minnesota. 

10.  Nebraska, 
Kan.sas, 

and  central 
Texas. 

Average,  191.3-1914 

SO.  967 

1.002 
.932 
.907 
1.056 
1.367 
1.466 

100 

104 
96 
94 
109 
141 
152 

«0.871 

.865 

.877 

.816 

1.009 

1.205 

1.029 

100 

99 
101 

94 
116 
145 
187 

SO.  917 

.899 
.935 
.756 
.980 
1.233 
1.337 

100 

98 
102 

82 
107 
134 
146 

$1,007 

1.074 
.940 
•      .882 
1.187 
1.485 
1.646 

100 

107 
93 
87 
118 
148 
164 

SO.  997 

1.063 
.9:50 
.872 
1.168 
1.453 
1.649 

1(X) 

1913 

1914 

1915 

1916 

1917 

191S.     . 

107 
93 
87 
117 
146 
165 

District 

11.  Rocky 
Mountain 
States— Col- 
orado, Utah, 
Montana,  and 
western 
Texas. 

12.  Pacific 
Coast  States- 
California, 
■Washington, 
and  Oregon. 

Average 

for  United 

States. 

Average, 

districts 

1,  2,  3,  4,  6. 

Eastern 
and  Middle 

Western 
States.a 

Average,  1913-1914 

1913. 

1914 

1915 

1917 

191S 

SI.  312 

1.319 

1..306 
1.289 
1.527 
1.664 
1.818 

100 

101 

99 
9S 
116 
128 
138 

SI. 369 

1.461 

1.277 
1.375 
1.458 
1.  399 
1.899 

100 

107 
93 
101 
107 
102 
139 

«0.966 

1.005 
.927 
.860 
1.103 
1.354 
1.590 

100 

104 
96 
89 
114 
140 
165 



100 

103 
97 
90 
114 
144 
168 

$0.9895 

.9999 

.9537 

.8934 

1. 1092 

1. 4413 

1.6671 

100 

101 
96 
90 
113 
146 
16i( 

'a  Price  section,  War  Industries  Board.    Base:  Average,  July  1, 1913,  to  June  30, 1914. 


144 


ECONOMICS   OF   THR    f CONSTRUCTION   INDUSTRY. 


Table  54. — Mill  j/rices  on  Portland  c/nnenl. 
[Average  net  prices  f.  o.  b.  plant.    Quotations  from  price  section,  War  Industries  Board.] 


Market . 


Period. 


1.  New  York 

and  New 
England. 


Quoted 
price. 


Rela- 
tive 
pncc. 


2.  New  England 

and  Middle 

States. 


Quoted 
price. 


Rela- 
tive 
price. 


3.  Ohio,  Indiana, 

Illinois,  and 
Michigan. 


Quoted 
price. 


Rela- 
tive 
price. 


4.  Northern  Ohio. 


Quoted 
price. 


Relative 
price. 


July  1,  1913,  to  June  30, 1914 

1913 

1914 

1915 

1916 

1917 

1918 • 

1917: 

First  quarter 

Second  (|uartcr 

Third  quarter , 

Fourth  quarter , 

1918: 

First  quarter 

Second  quarter , 

Third  quarter 

Fourth  quarter , 

Market 

July  1, 1913,  to  June  30, 1914 

1913 

1914 

1915 

1916 

1917 

1918 

1917: 

First  quarter 

Second  quarter 

Third  quarter 

Fourth  quarter 

1918: 

First  quarter 

Second  quarter 

Third  quarter , 

Fourth  quarter 


$1.0808 
1.0442 
1.0500 
.8142 
1.0342 
1.3358 
1.6733 

1. 18r.7 
1.40:53 
1.4100 
1.3433 

1.5300 
1.6333 
1.7300 
1.8000 


100 
97 
97 
75 
96 
124 
155 

110 
130 
130 
124 

141 
151 
160 
166 


SO.  9000 

.9(KX) 

.9000 

.8292 

1.0917 

1.4750 

1.8333 

1.4000 
1.5000 

1.5000 

1.6330 
1.9000 
1.9000 
1.9000 


100 
100 
100 
92 
121 
164 
204 

136 
167 
107 
167 

181 
211 
211 
211 


$1.0042 
1.0408 
.9600 
.9617 
1.2000 
1..5725 
1.7633 

1.3867 
1.6033 
1. 6.567 
1.6433 

1.7000 
1.7567 
1. 7667 
1.8300 


100 
104 
96 
96 
119 
1.57 
176 

138 
160 
165 
164 

169 
175 
176 
182 


$1.0270 
1.0406 
.  <iH'M 
.9.545 
1. 122') 
1.4472 
1.0374 

1.2947 
1. 44.53 
1.  4.5.30 
1. 5957 

1.5150 
1. 6837 
1.6S;?7 
1.6673 


100 
102 
% 
93 
109 
141 
159 

126 
141 
142 
156 

148 
164 
164 
162 


5.  Dlinois. 


6.  Upper 

New  York 

State. 


7.  Average  for 

Eastern  and 

Middle  Western 

States. 


8.  Natural  cement. 

Kansas, 

Missouri,  Oklahoma, 

Nebraska. 


$0. 9.595 

.9906 

.9052 

.8821 

1.1144 

1.3975 

1.5500 

1.2930 
1.41(30 
1.4.5.57 
1. 4313 

1.  4953 
1. 5787 
1.5610 
1.5650 


100 
103 
94 
92 
119 
146 
162 

1.35 
147 
152 
149 

156 
■164 
163 
163 


$0. 9658 

.9833 

.9240 

.9191 

1.0929 

1.4199 

1.5453 

1.2873 
1.4163 
1.5020 
1.4740 

1.4467 
1.5740 
1.5973 
1.5630 


100 
102 
96 
95 
113 
147 
160 

133 
146 
155 
152 

150 
163 
165 
162 


SO.  9895 

100 

.9999 

101 

.9.5.37 

96 

.8934 

90 

1.1092 

113 

1.4413 

146 

1.6671 

168 

1.  .3081 

132 

1. 4030 

148 

1.4962 

151 

1.4979 

151 

1.5533 

157 

1.6877 

170 

1.7064 

172 

1.7209 

174 

$0.5000 
.5000 
.5000 
.5000 
.6000 
.6500 
.8500 

.6.500 
.6500 
.6.500 
.6500 

.8500 
.8500 

.8.500 
.8500 


100 
100 
100 
100 
120 
130 
170 

130 
130 
130 
130 

170 
170 
170 
170 


Table  55. — Wholesale  prices  on  Portland  cement. 
[Net  prices  for  carload  lots.] 


Market. 


F.  o.  b.  plant 

western 
Washington.a 


New  Yorfc.b 


Chiea 

go.c 

Quoted 

Rela- 
tive 

price. 

price. 

SI.  1.500 

100 

dl.OoOO 

91 

1.1,500 

100 

1.1.500 

100 

1.  38.50 

120 

1.7807 

1.55 

1.9C75 

171 

1.  5930 

139 

1.8100 

157 

1.9100 

166 

1.8100 

157 

1.8100 

157 

1.96C0 

170 

2.0500 

178 

2.0500 

178 

2.05 

178 

2.00 

174 

St. 
Louis.c 


Cin. 
cin- 
nati.": 


Dal- 
las.c 


San 
Fran- 
cisoo.e 


Period. 


Quoted 
price. 


July  1, 1913,  to  June  30, 1914 . 

1913 

1914 

1915 

1916 

1917 

1918 

1917: 

First  quarter 

Senond  q  uarter 

Third  quarter 

Fourth  quarter 

1918: 

First  quarter 

Second  quarter 

Third  quarter 

Fourth  quarter 

1919: 

First  quarter 

April 


$1.3842 
1.  5218 
1.2750 
1.5150 
1.  5467 
1.7158 
1. 8742 

1.6333 
1. 6W)7 
1.6533 
1.9100 

1. 8633 
1.9S0O 
1.85<i6 
1. 7967 


Rela- 
tive 
price. 


Quoted 
price 


100  !$1.  ISOO 
1.  IS(X) 
1.1800 
1.0300 
1. 2950 
1. 6740 
2.0800 


110 
92 
109 
112 
124 
136 

118 
120 
119 
13S 

135 
143 
134 
130 


1.  .5.366 
1.7200 
1.7200 
1.7200 

1.7400 

2.  1760 
2.2000 
2.2000 

2.2000 
2.0500 


Rela- 
tive 
price. 


100 
100 
100 
87 
109 
141 
176 

130 
146 
146 
146 

148 
184 
186 
ISO 

186 
174 


Q"«*^dReT 
P"^-    price 


Quoted  Quoted 
price.  I  price. 


$1.45    

1.85    

2.  26   $2.  40 


$2.29 


1.75 
2.05 
2.05 

2.05 
2.15 
2.29 
2.30 

2.30 
2.30 


1.93 
2.30 


2.47 
2.47 
2.27 
2.40 

2.44 


1.75 
2.07 

2.  27 
2.20 
2.20 
2.48 

2.  .53 
2.03 


$1.89 
1.97 
2.37 

1.90 
2.20 
L90 
1.90 

2.10 
2.43 
2.45 
2.48 

2.77 
3.00 


a  From  price  section.  War  Industries  Board. 
6  From  private  somces. 


c  From  the  Engineering  News-Record, 
d  Figure  for  Jime,  1913. 


ECONOMICS    OF   THE    CONSTRUCTION    INDUSTRY. 


145 


Table  56. — Freight  rates  on  Portland  cement. 
[Per  100  pounds.] 


To— 


1914 


1919 


Buffington.  Ind. 
La  Salle,  111.... 


Bufflngton,  Ind . . . 

La  Salle,  lU 

Hannibal,  Mo 

Mason  City,  Iowa  . 

Mason  City,  Iowa  . 

Hannibal,  Mo 

La  Salle,  lU , 

Tola,  Kans , 

Buffington,  Ind... 


Mason  City,  Iowa . 

Haiinihal,  Mo 

La  Salle,  111 

Ida,  Kans 

Buffington,  Ind. . , 


Mitchell,  Ind... 
Bellevue,  Mich . 

Stroh,  Ind 

Buffington,  Ind. 


Mitchell,  Ind... 

Stroh,  Ind 

Bellevue,  Mich. 
Buffington,  Ind. 
Alpena,  Mich. . . 


Mitchell,  Ind. 
Mitchell,  Ind. 


Cementon,  N.  Y. . . 
Howes  Cave,  N.  Y. 
Glenn  Falls,  N.Y. 

AUentown,  Pa 

Coplay,  Pa 


Mitchell,  Ind... 
Buffington,  Ind. 

Oglesbv,  111 

La  Salle,  111 

Dixon,  III 

Hannibal,  Mo.. 


Slilwaukee,  Wis 

....do 

Average  increase,  05  per  cent. 

La  Crosse,  Wis 

....do 

....do 

....do 

Average  increase,  57  per  cent. 

Des  Moines,  Iowa 

....do 

....do 

....do 

....do 

Average  increase,  13  per  cent. 

Sioux  City,  Iowa 

....do...... 

....do 

do 

....do 

Average  increase,  13  per  cent. 

Detroit,  Mich 

do 

....do 

do 

Average  increase,  49  per  cent. 

Battle  Creek,  Mich 

do 

....do 

do 

do 

Average  increase,  56  per  cent. 
Louisville,  Ky 

Increase,  70  per  cent. 
Indianapolis,  Ind 

Increase,  41  per  cent. 

New  York , 

do 

do 

do 

do 

Average  increase,  23  per  cent. 

Chicago,  HI 

do 

do 

do 

do 

do 

Average  increase,  40.7  i)er  cent. 


$0. 


05 

$0.08 

05 

.085 

08 

.115 

08 

.11 

08 

.13 

05 

.10 

063 

.085 

10 

.115 

10 

.115 

125 

.135 

12 

.125 

084 

.105 

13 

.145 

13 

.14 

13 

.14 

13 

.15 

095 

.13 

05 

.085 

05 

.085 

08 

.U 

09 

.125 

05 

.085 

025 

.055 

(K) 

.095 

08 

.115 

.06 


.085 
.085 


09 

.11 

10 

.12 

10 

.12 

095 

.115 

095 

.115 

065 

.085 

03 

.05 

(V45 

.005 

045 

.005 

045 

.065 

005 

.085 

Source:  Interstate  Commerce  Commission;  Portland  Cement  Association. 

SECTION  Xn.  MINER.\L  AGGREGATE. 
Introduction. 

If  the  classification  followed  in  writing  this  chapter  were  based 
solely  on  the  origin  of  the  various  products,  crushed  stone  should 
be  more  properly  treated  under  the  heading  of  "Quarry  Products." 
However,  in  this  case,  it  seems  more  logical,  from  the  point  of  view 
of  use  of  the  material,  to  include  crushed  stone  in  the  same  category 
with  sand  and  gravel. 

Relative  importance  of  sand,  gravel,  and  crushed  stone. 

It  has  been  stated  by  the  United  States  Geological  Survey  that  only 
foui*  natural  nonmetallic  minerals  produced  in  the  United  States — 
not  including  clay  products  and  cement  (manufactured  products) — 
show  a  greater  value  than  sand   and  gravel;  these   are  petroleum, 

121297°— 19 10. 


14G  ECONOMICS    OF   THE    CONSTRUCTION    INUUSTKY. 

nalural  gas,  coal,  and  stone,  llie  production  of  sand  and  gravel 
in  1917  was  valued  at  more  than  $35,000,000,  which  is  probably  an 
iHidorvalyation,  l)ocauso  it  is  impossible  to  get  complete  returns. 

The  Geological  Survey  reports  on  various  kinds  of  sands  and 
gravels,  according  to  uses,  including  glass  sand,  l)uilding  sand, 
grinding  and  polishing  sand,  fire  or  furnace  sand,  engine  sand, 
paving  sand,  filter  sand,  other  sands,  railroatl-ballast  sand  and  gi'avel, 
and  gravel. 

In  the  year  1916,  of  the  total  ciuantity  of  sand  and  gravel  produced, 
47  per  cent  was  building  sand,  7  per  cent  paving  sand,  and  24  per  cent 
sand  and  gravel  for  railroad  ballast.  In  the  same  year  the  average 
price  per  short  ton  of  all  sand  and  gravel  was  33.4  cents;  of  building 
sand,  31.5  cents;  of  paving  sand,  35.7  cents;  and  of  railroad  ballast 
sand  and  gravel,  13.1  cents. 

In  1916  crushed  stone  represented  in  value  37  per  cent  of  the  total 
output  of  stone  in  the  country.  Of  the  total  quantity  of  crushed 
stone  produced  in  that  year  10  per  cent  was  granite,  19  per  cent 
basalt  and  related  rocks  (trap  rock),  67  per  cent  limestone,  and 
4  per  cent  sandstone.  In  that  year  the  average  price  per  short  ton, 
f.  o.  b.  plant,  of  crushed  stone  of  all  kinds  was  61  cents;  of  crushed 
granite,  75  cents;  of  basalt  and  related  rocks  (trap  rock),  73  cents; 
of  crushed  limestone,  55  cents;  of  crushed  sandstone,  77  cents. 

Imports  and  exports  of  these  materials  are  insignificant.  Small 
amounts  are  exported  to  Canada  each  year,  and  small  amounts 
are  brought  into  the  United  States  from  Canada  and  from  other 
countries  as  ballast. 

No  figures  are  at  hand  on  chats,  chert,  or  slag,  which  are  used 
fairly  extensively  in  some  localities,  but  which  are  considerably  less 
important  than  sand,  giravel,  and  crushed  stone. 

Production  figures. 

Production  figures  on  building  sand,  graAel,  and  crushed  stone  for 
the  years  1913-1918  are  given  in  Table  57.  The  figures  show  that 
production  of  building  sand  in  1918  was  2  per  cent  above  the  average 
for  the  preceding  five  years.  Gravel  in  1918  was  34  per  cent  under 
the  average  for  the  preceding  five  years.  Crushed  stone  in  1918 
was  30  per  cent  mider  the  average  for  1913-1917. 

Regional  production. 

Regional  })roduction  of  crushed  stone,  as  affected  hj  war  conditions 
and  as  affecting  war-time  prices,  has  been  considered  in  Section  X 
of  this  chapter. 

Sand  and  gravel  are  so  widely  distributed  and  so  abundant  that 
any  consideration  of  then"  regional  distriimtion  seems  scarcely 
necessary.  The  markets  are  strictly  local,  and  are  largely  deter- 
mined by   existing  schedules  of  freight   rates.     The  supplies  being 


ECONOMICS   OF   THE    CONSTRUCTION    INDUSTRY.  147 

plentiful,  the  quantity  produced  is  usually  measured  h}'^  the  effective 
demand. 

During  the  war  the  demand  for  sand  and  gravel  was  greatly 
accentuated  in  certain  localities  on  and  near  the  Atlantic  coast, 
on  account  of  increased  requirements  for  the  construction  of  can- 
tonments, shipyards,  and  factories  engaged  in  the  manufactui^e  of 
munitions  and  other  war  necessities.  In  some  cases,  on  account  of 
unprecedented  needs,  sand  and  gravel  were  shipped  as  far  as  300 
miles  by  sea  in  coal  barges.  This  accounts  for  the  fact  that  these 
products,  along  with  certain  other  basic  materials,  rose  rather  more 
in  the  eastern  part  of  the  United  States  than  elsewhere. 

The  price  record. 

Since  the  prices  on  the  products  treated  in  this  section  are  so  largely 
determined  by  local  conditions,  it  has  been  considered  advisable  to 
present  a  considerable  number  of  representative  figures. 

The  first  three  tables  (Tables  58  to  60)  give  f.  o.  b.  plant  prices 
from  various  sources.  Table  61  gives  prices  in  the  following 
representative  markets:  New  York,  Chicago,  St.  Louis,  Cincinnati, 
Dallas,  and  San  Francisco.  These  figures  are  taken  from  files  of  the 
Engineering  News-Record. 

The  figures  of  the  first  series  of  Table  59  indicate  that  the 
rise  in  the  eastern  part  of  the  country  was  considerably  higher  than 
in  other  sections. 

Some  additional  figures  on  prices  of  crushed  stone  have  been 
furnished  by  plants  in  Kansas  and  Oklahoma.  These  prices  are 
f .  o.  b.  plants.  The  average  for  1916  was  85  cents  per  ton ;  for  1918, 
$1.22  per  ton ;  and  for  the  first  quarter  of  1919,  $1.25  per  ton.  Tlie 
increase  shown  by  these  figures  is  47  per  cent. 

The  most  representative  price  figures  for  the  whole  country  are 
yearly  averages  given  in  Table  57.  It  is  largely  from  these  figm'es 
that  the  composite  index  for  the  mineral  aggregate  group  has  been 
computed. 

In  computing  this  index,  given  in  the  last  column  of  Table  60,  the 
index  figures  for  building  sand,  gravel,  and  crushed  stone  were  first 
computed,  the  average  price  for  the  years  1913-14  being  taken  as  a 
base,  so  that  the  figures  would  correspond  as  neai>ly  as  possible  to  the 
various  other  sets  of  figures  which  use  the  year  preceding  July,  1914, 
as  base.  These  figures  have  been  combined ,  weighting  fa ctors  propor- 
tional to  the  average  production  of  each  commodity  for  the  years 
1913  and  1914  being  employed.  In  computhig  the  quarterly  figm'es 
for  1917  and  1918  it  has  been  assumed  that  the  fluctuations  would 
bo  proportional  to  the  fkictuations  indicated  by  the  average  of  all 
the  indices  computed  ])y  the  price  section  of  the  War  Industries 
Board. 


148  ECONOMICS   OF    THE    CONSTRUCTION    INDUSTRY. 

'i'hc  liiial  (ijjjuie,  I7ii,  is  pi-obably  a  fairly  accuiate  index  of  the 
general  price  level  of  this  gioup,  based  on  f.  o.  b.  ])hint  prices 
throu<.!^hout  the  country. 

The  iruU^K  foi'  the  first  quarter  of  the  current  year  would  probably 
be  about  1  75. 

Increased  production  costs. 

Producers  of  sand,  gi'avcl,  and  crushed  stone  maintain  that  their 
prices  have  not  risen  out  of  proportion  to  the  rise  in  production  costs; 
that  production  costs  are  not  likely  to  decrease ;  and  that  their  prices 
are  rather  more  likely  to  increase  somewhat  than  to  decrease. 

It  is  of  some  interest  to  present  some  figures  on  production  costs. 
Actual  production  costs  and  prices  ha^e  been  furnished  by  certain 
producers.  The  figures  given  below  are  averages  from  28  plants  in 
various  localities  in  the  Central  States : 

Prices  and  production  costs  of  sand  and  (jravel. 


Period. 

Average 

price  i)er 

ton. 

Average 

production 

cost  per 

ton. 

1916 

CerUs. 
45.4 
60.4 
65.0 

Cents. 
34.5 

1918 ..                   .       . 

58.5 

1919  (first  quarter; 

58.5 

lncre;xse,  1919  over  191C 

Per  cent. 
43 

Per  cent. 
70 

These  figm'es  would  indicate  that  the  1918  prices  were  too  low 
to  allow  for  a  sufTicient  profit  to  the  producers.  It  is  impossible  to 
state  that  these  figures  indicate  the  situation  of  the  industry  as  a  whole. 

With  the  cooperation  of  Mr.  E..  Guy  Sutton,  secretary  of  the 
National  Association  of  Sand  and  Gravel  Producers,  some  interest- 
ing figures  have  been  obtained  from  93  representative  producers 
whose  plants  are  located  in  all  parts  of  the  country. 

As  a  result  of  averaging  the  figures  obtained  from  questionnau'es 
sent  out,  it  is  possible  to  present  some  figures  wliich  may  be  taken 
as  fairly  representative  of  the  industry  as  a  whole.  According  to 
these  figures  administrative  expenses  (including  costs  of  office 
supplies,  rent,  postage,  salaries  of  office  force,  etc.)  were  70  per 
cent  gi-eater  in  1918  than  in  1913;  selling  expenses  (including 
salaries  and  expenses  of  salesmen,  etc.)  were  58  per  cent  greater; 
operating  expenses  (including  lal)or,  salaries  of  superintendents, 
drayage,  fuel,  cost  of  repairs  and  supplies,  etc.)  were  105  per  cent 
greater;  replacement  costs  (including  cost  of  necessary  machinery, 
materials,  and  labor)  in  the  first  quarter  of  1919  were  estimated  to 
be  1 14  per  cent  gi'eater  than  in  1913. 


ECONOMICS   OF   THE    CONSTRUCTION    INDUSTRY. 


149 


According  to  these  93  producers,  iii  normal  times  the  labor  cost 
is  41  per  cent  of  the  total  production  cost;  while  in  1918  it  was  52 
per  cent  of  the  total.  In  normal  times  the  cost  of  fuel  is  12  per 
cent  of  the  total;  in  1918  it  was  16  per  cent. 

The  figui'es  indicate  an  average  rise  in  wages  of  95  per  cent  from 
1913  to  1918,  and  an  increase  of  105  per  cent  in  the  cost  of  fuel. 

Of  the  expenses  discussed  above,  administrative  expenses,  selling 
expenses,  and  replacement  costs  come  under  the  classification  of 
overhead  charges.  With  an  increased  volume  of  business  these 
might  become  relatively  smaller  in  proportion  to  the  total  produc- 
tion cost.  The  cost  of  fuel  has  declined.  However,  with  wages 
permanently  increased,  the  total  cost  of  production  seems  likely  to 
remain  fairly  close  to  the  present  figure.  If  it  be  true  that  1918 
prices  were  too  close  to  the  cost  of  production  to  permit  a  reasonable 
margin  of  profit,  then  the  contention  of  the  producers  that,  in  gen- 
eral, prices  can  not  be  cut  in  1919  seems  fairly  well  justified. 

The  following  table  gives  an  itemized  statement  prepared  from 
actual  figures  of  production  costs  in  1916  and  1918  in  a  representa- 
tive plant: 

Cost  of  production  of  sand  and  gravel  in  a  representative  plant. 


Item. 


1916 


Ton  cost. 


Per  cent 
of  total. 


Labor , 

StriDping 

Fuel 

Supplies  and  repairs 

Depletion 

Depreciation 

Fixed  charges 

Total 


$0.0756 
.0235 
.0345 
.0:M7 
.0067 
.0124 
.  0582 


.2356 


32.1 
10.0 
10.4 
14.7 

2.8 
5.3 
24.7 


100.1 


Ton  cost. 


$0,163 
.040 
.043 
.027 
.010 
.025 
.099 


.407 


Per  cent 
of  total. 


40.1 
9.S 

10.5 
6.6 
2.7 
6.1 

24. 2 


100.0 


Increase. 


Per  cent. 
107 
79 
75 
22 


102 
70 


Increases  in  elements  of  production  costs,  by  regions. 

According  to  the  figm-es  furnished  by  the  93  producers  mentioned 
above,  administrative  expenses,  selling  expenses,  operating  expenses, 
and  replacement  costs  increased  most  in  the  Middle  Atlantic  States 
(New  York,  New  Jersey,  Pennsylvania). 

Operating  expenses,  however,  show  the  same  increase  in  the 
Southern  States  (Virginia,  South  Carolina,  Georgia,  Alabama,  Ken- 
tucky, and  Tennessee)  as  in  the  Middle  Atlantic  States.  This  is 
accounted  for  by  the  fact  that  the  wage  increase  was  greatest  in  the 
Southern  States,  with  the  Middle  Atlantic  States  coming  second. 

The  Southwestern  States  (Missomi,  Kansas,  Oklahoma,  Texas, 
Ai-kansas,  and  Louisiana)  show  the  gi-eatest  increase  in  cost  of  fuel, 
wdth  the  Middle  Atlantic  States  second. 


150  j:c'onomic;s  of  thk  coNSTRrcTioN  ixdustky. 

Ill  general,  costs,  as  reported  by  these  producer.^,  increased  less 
in  the  West  than  in  other  sections. 

Freight  rates  on  sand,  gravel,  and  crushed  stone. 

One  of  the  important  elements  in  the  increase  of  cost  of  sand, 
jnavel,  and  crushed  stone  in  constmction  has  been  the  increase  in 
freight  rates — the  freight  being  a  very  large  item  in  the  final  cosf. 
Since  the  beginning  of  the  year  1919,  the  producers,  through  their 
organizations,  made  a  determined  effort  to  secure  from  the  Railroad 
Administration  some  concessions  on  the  rates. 

After  careful  consideration  of  the  question  the  Railroad  Adminis- 
tration fomid  itself  unable  to  meet  the  demands  of  these  producers 
so  far  as  rates  to  the  general  public  were  concerned.  A  conces- 
sion was  made  in  the  case  of  such  materials  for  use  in  the  construc- 
tion of  public  works  by  Federal,  State,  and  municipal  governments. 
This  concession  was  made  in  an  order,  already  referred  to  in  Section 
VI,  providing  for  a  reduction  of  10  cents  per  net  ton  on  sand,  gravel, 
and  crushed  stone,  \A'ith  a  minimum  rate  of  40  cents  per  net  ton, 
except  in  cases  where  the  regular  commercial  rates  are  less  than 
that  figure,  in  which  cases  the  regular  rates  still  hold. 

As  long  as  there  seemed  to  be  grounds  for  hoping  for  a  general 
reduction  in  rates  on  these  materials  there  seemed  to  be  a  promise 
of  a  reduction  in  ultimate  prices  to  the  public.  At  present,  except 
in  the  case  of  public  projects,  there  appears  to  be  no  chance  of  a  reduc- 
tion in  rates  or  prices  in  general. 

Tables  62  and  63  give  examples  of  freight  rates  on  sand,  gravel, 
and  ciTished  stone  from  producing  points  to  various  representative 
markets.  These  should  be  considered  as  illustrations  rather  than  as 
indications  of  the  general  rise  in  rates  for  the  vdiolo  countiy.  The 
number  of  rates  given  is  scarcely  sufficient  to  use  for  an^-thing  more 
than  illustration. 

Somewhat  more  representative  figures  on  sand  and  gravel  rates 
have  been  fm^nished  by  the  National  Ajssociation  of  Sand  and  Gravel 
Producers.  These  figui'es  are  the  results  of  a  questionnaire  sent  out 
by  the  association  early  in  March.  They  cover  the  increases  in  rat-es 
in  effect  in  March,  1919,  over  those  in  effect  in  March,  1918,  the 
increases  having  been  effected  by  General  Order  No.  2?  of  the  Rail- 
road Administration  in  June,  1918. 

An  average  of  1,951  rates  shows  an  increase  of  ol  x>or  cent.  This 
is  perhapi-  a  fairly  representative  figm'e.  It  is  true  that  over  half  the 
rates  included  in  the  average  were  between  points  in  the  Central 
West;  but  the  average  for  this  section  is  practically  the  same  as  for 
the  remainder  of  the  country. 


ECOiSrOMICS   OF   THE    CONSTRUCTION    INDUSTRY. 


151 


Table  57. — Production  fifjures  on  sand ,  (jravel,  and  crushed  stone,  ]9} -1-1918. 
[Figures  from  U.  S.  Geological  Survey.    Short  tons.] 


Building  sand. 

Gravel. 

Crushed  stone. 

Year. 

Quantity. 

\'^alue. 

Av- 
erage 
price 
per 
ton. 

Quantity. 

^"alue. 

Av- 
erage 
price 
lier 
ton. 

Quantity. 

Value. 

Ar- 

erag» 
price 
per 
ton. 

1913 

1914 

1915 

1916 

1917 

191SO 

2-5,397,383 
24,003,962 
22,921.426 
27,193,462 
2-5,374,987 
25,-500,000 

$8,007,949 
7,688,774 
6,884,267 
8, 569, 675 
9, 837, 688 

11,000,000 

$0.31 
.32 
.30 
.31 
.38 
.43 

40,861,694 
41,329,287 
40,661,314 
46, 127, 754 
35,573,819 
27,000,000 

S9, 109, 663   $0.22 
9,721,637       .23 
9,948,-516       .24 
12, 220, 146       .  26 
13, 508, 189       .  37 
12,000,000       .44 

48,  .502,  501 
49,364,476 
49,(X)S,7()7 
48,075,-581 
40,285,377 
33,0;}4,000 

S2«,.592,.536 
30,161,766 
29,  173,4nS 
29,462,9-52 
29,065,-509 
32,843,000 

$0.  -5) 
.61 
.60 
.61 

.72 

a  Quantities  and  values  for  year  1918  estimated. 

Table  58. — Prices  on  sand  and  (jravel. 

[Figures  from  private  sources.    Prices  per  ton  f.  o.  b.  plant.] 


Place. 


Maine  (1  series) , 

Eastern  Massachusetts  (average 

2  series) 

New  York  City  (1  series) 

Western  New  York  (1  series) 

Western  Pennsylvania  (average 

2  series) 

New  Jersey  (1  series) 

West  \u-ginia  (1  series) 

Eastern  Maryland  (1  series) 

Virginia  ( 1  series) 

Ohio  (average  2  series) 

Kentucky  ( 1  series ) 

Tennessee  (average  2  series) 

Indiana  (average  19  series) 

Northern  Illinois 

Michigan 

Iowa  (average  21  series) , 

Wisconsin  (average  7  series) 

Northern  Minnesota  (1  series) . .. 

Nebraska  (1  series) 

Missouri  (average  2  series) 

Kansas  (average  2  series) 

Oklahoma  ( 1  series) 

Central  Texas  (average  2  series) . 

Colorado  (1  series) 

Western  Washington 

Average 


Sand. 


1916 
price. 


1918 
price. 


SO.  50 

.38 
.43 
.50 

.93 
.35 
.95 
.60 
.60 


.57 


First 

quarter 

1919 

price. 


$0.50 

.33 
.43 
.50 

.93 
.35 
.75 
..50 
-50 
.65 
.85 
.64 
.46 
.40 
.68 
.67 
.60 
.56 
.  75 
.58 
.58 
.60 
.50 


.58 


Increa.=;e, 

1919  over 

1916. 


Per  cent. 
11 


38 


Gravel. 


191G 
price. 


$1. 05 

.78 

"".'zh' 


-43 
.(>0 
-.50 
1.00 
.90 
.46 
.44 
.53 
.55 
.30 
.55 
.49 
.35 
.47 
.65 
.35 


.40 

.44 


1918 
price. 


.?1.25 
1.10 


.50 

.83 
1.40 

.95 
1.50 
1.20 

.65 

.75 


.63 
.40 
.75 
.63 
.56 
.56 
.75 
.53 


.00 

.62 
.90 

.75 


First 
quarter 

1919 
pric-e 


Increase, 

1919  over 

1916. 


Per  cent. 
SI -25  19 


1-05 


.50 

.83 
1.20 
.75 
1.30 
.95 
.70 
.75 
.79 
.63 
.40 


.58 


.60 
.71 
.90 


.70 


95 

UTi) 

5,) 
30 
5 
-54 
7a 
49 
15 

:« 

3.) 
37 
71 

1') 

15 
(W 


52 


EfJONOMICS   OF   THE   CONSTRUCTION   INDUSTRY. 


T.\DLK  59. — Sand  and  firnvel  prices. 
I  Trices  f.  o.  b.  plant.    Quotations  from  price  section,  War  Industries  Board.) 


Sand. 

Sand, 

building,  core, 

engine,  and 

Sand, 
building  and 

Sand 
and  gravel, 

Clrav 

el. 

?lass, 
grinding. 

locomotive. 

building. 

Market 

Eastern 
United 

States. 

Chicago. 

-Mton  and 

surrounding 

district. 

Virginia 
and 
Ohio. 

Erie, 

Pa. 

Unit 

Short  ton. 

Short  ton. 

Short  ton. 

Short  ton. 

Short  ton. 

Period. 

Quoted 
price. 

Rela- 
tive 
price. 

Quoted 
price. 

Rela- 
tive 
price. 

Quoted 
price. 

Rela- 

ti\-e 
price. 

Quoted 
price. 

Rela- 
tive 
price. 

Quoted 
price. 

Rela. 
tive 
price. 

July  1 ,  1913,  to  June  30, 1914. . 
191.3  

10.6002 
.  5973 
.5993 
.6003 
.6-178 
1.0917 
1.4796 

.9317 
1.0360 
1.1427 
1.2565 

1.4540 
1.4540 
1.4827 
1.5276 

100 
99 
100 
100 
108 
182 
246 

1.55 
172 
190 
209 

242 
242 
246 
254 

SO. 1701 
.1620 
.1677 
.18.54 
.18.57 
.2713 
.3227 

.22fX) 
.2466 
..3000 
.3186 

.3280 
.  32.33 
.3198 
.3198 

100 
95 
98 
109 
109 
159 
190 

129 
145 
176 
187 

193 
190 
188 

188 

$0.2925 
.2763 
.2979 
.3067 
..%394 
.4465 
.6388 

.4217 
.4094 
.4617 
.4933 

.6367 
.  6233 
.6517 
.6433 

100 
94 
102 
105 
116 
1.53 
218 

144 
140 
158 
169 

218 
213 
223 
220 

$0..3500 
.  3.500 
..3.500 
.  3.500 
.3500 
.  4.5IX) 
.7500 

.4500 
.4500 
.4500 
.4500 

.7500 
.7500 
.7500 
.7500 

100 
100 
100 
100 
100 
129 
214 

129 
129 
129 
129 

214 
214 
214 
214 

$0.6500 
.6500 
.6500 
.6642 
.7083 
.7708 
1.0375 

.7333 
.7500 
.7,500 
.8500 

1.0000 
1.0000 
1.0000 
1.1500 

100 

100 

1914  

100 

1915 

102 

1916    

109 

1917 

119 

1918 

160 

113 

Second  quarter 

115 
115 

131 

1918: 

154 

Second  quarter 

154 

154 

Fourth  quarter 

177 

Table  60.- 
[  Prices  f.  0.  b.  plant. 


-Prices  on  sand,  gravel,  and  crushed  stone. 
Quotations  from  price  section.  War  Industries  Board.] 


Commodity. 


Sand  and 

g^a^  el  railway 

ballast. 


M;ii'ket 


Ohio. 


Crushed 

limestone 

railway 

ballast. 


Pennsylvania. 


Crushed 
trap  rock 

railway 
ballast  and 
road  metal. 


Pennsylvania. 


Crushed 

granite,  5-inch 

and  -'.-inch. 


Chicago, 
Detroit,  and 
Cleveland. 


Min- 
eral aggre- 
gate.' 


United 

States. 


Short  ton. 


Short  ton. 


Short  ton. 


Cubic  yard. 


Period. 


Quoted 
price. 


July  1 ,  1913,  to  June  30, 1914 

1913 

1914 

1915 

1916 

1917 

1918 

1917: 

First  q  uarl  er 

Second  quarter 

Third  q  uarter 

Fourth  quarter 

1918: 

First  quarter 

Second  c|  uarter 

Third  quarter 

Fourth  quarter 


$0. 1650 
.1650 
.16.50 
.1650 
.1650 
.20(X) 
.2250 


.2000 
.2000 
.2000 
.2000 

.2250 
.2250 
.  22.50 
.2250 


Rela- 
tive 
price.  I 


Quoted 
price. 


Rela- 
tive 
price. 


Quoted 
price. 


100 
100 
100 
100 
100 
121 
136 


121 
121 
121 
121 

136 
136 
136 
136 


$0.6800 
.6800 
.6X00 
.6.S00 
.7325 
.8167 
1.0417 


.7500 
.8167 
.8500 
.8500 

.8500 
1.0167 
1.1500 
1.1500 


100 
100 
100 
100 
108 
120 
153 


110 
120 
125 
125 

125 

■149 

169 

169 


SO. 6700 
.6475 
.6633 
.  60.S3 
.6683 
.8275 
1.1125 


.  tKS.33 
.8100 
.9167 
.9000 

.9667 
1.1233 
1.1233 
1.2367 


Rela- 
tive 
price. 


Quoted 
price. 


100 
97 
99 
91 
100 
124 
166 


102 
121 
137 
134 

144 
168 
168 
1S.5 


$1.2500 
1.2.T00 
1.2500 
1.2500 
1.2700 
1.3000 
1.3000 


1.3000 
1..3000 
1.3000 
1.3000 

1.3000 
1.3000 
1.3000 
1.3000 


Rela- 
tive 
price. 


Com- 
posite 
index. 


KX) 
100 
100 
100 
102 
104 
104 


104 
104 
104 
104 

104 
104 
104 
104 


100 
98 
102 
101 
104 
129 
167 


118 
125 
134 
140 

161 
165 
168 
173 


1  Composite  figure  computed  by  T.  S.  Holden  from  all  figures  obtainable. 


E(JOXOMICS    OF   THE    CONSTRUCTION    INDUSTRY. 


153 


T.\iiLE  61. — Wholesale  market  prices  on  sand,  gravel,  and  crushed  stone. 
[  Prices  per  cubic  yard  in  carload  lots.    Quotations  from  the  EngiDeering  News-Record.] 


Market 

New  York 

Chicago. 

St.  Louis. 

Date. 

Build- 
ing 
sand. 

Gravel, 
IVincli. 

Crushed 
stone, 
li-inch. 

.sand.i     IHnch. 

Crushed '  Build- 
stone,         ing 
li-inch-  .    sand. 

Gravel, 
IJ-inch. 

Crushed 
stone, 
IJ-inch. 

April  1913 

$0.50 
.50 

$0.85 
.90 
.85 
.80 
1.20 
2.00 
2.00 

$0.90 
1.00 
.85 
.85 
1.10 
1.60 
1.70 

April,  1911 



i 

\pril  1915 

April,  191 6 

.15 
.50 
1.25 
1.25 

$0.  90        $0. 90 
1.10           1.40 
1.50           1.50 
1. 10           2. 00 

80.90 
1.40 
1.50 
1.60 

SO.  60  i      $0.  70 
.91  1          .85 
1.21           1.21 
1.68           1.76 

$1.00 

Anril,  1917 

1.25 

April.  1918 

1.35 

April,  1919 

1.35 

Market 

- 
Cincinnati. 

Dallas. 

.''an  Francisco. 

April,  1916 

1 

SO.  80 
1.00 
1.00 

$0.90 
1.00 
1.00 

$1.25 

April,  1917 

1 

SO.  95 
I  1.  75 

$1.25         SI.  00 
1. 10           2.  00 
1.35  ;        2.2.5 

SI.  36 
1.51 
2.25 

1.00 

April,  1918.. 

I  1. 65 

2.85 

I  1.65 

-..85 

1.00 

April,  1919 

1.15          1.15 

1.15 

'  Figure  for  preceding  month.  -  Figure  from  "  Rock  products." 

T.\Bi.E  62. — Freifjht  rates  on  sand  and  (jrurd. 
[Per  100  pounds.] 


Gravel. 


From 


Rhinecliff,  N.  Y 
Round  Lake,  N.  Y 
Van  Hoesen,  N.  Y 

Wemple,  N.  Y '< do 

iSouth  Amboy,  N.J do 

Corsackie,  N.  Y ' do 

Hemp.stead,  N.  Y do 

Marlboro,  N.  Y { do. 

Mechanicsville,  N.  Y do. 

New  Hamburg,  N.  Y do 


Average  increase 


Benton  Harbor,  Mich Chicago,  111 . 

Elgin,  111 I do 


Michigan  ("it  v,  Ind  . 

Ottawa,  111.." 

Rockdale,  111 


Average  Increase. 


Crystal  City,  Mo... 

Drake,  Mo 

East  J^t.  Louis,  111. 

Klondyke,  Mo 

Masselie,  Mo 

Pacific,  Mo 


Average  increase. 


Grand  Prairie,  Tex. 

Lindsav,  Tex 

Waco,  Tex 


Average  increase. 


Plca.'^nnton,  Calif 

Antioch,  Calif 

(^ampboU,  Calif 

Niles,  Calif 

Oakland,  Calif 

Pacific  Grove,  Calif. 


Average  increase. 


.do. 
.do. 
.do. 


St.  Louis,  Mo. 

do 

do 

do 

do 

do 


Dallas,  Tex. 

do 

do 


San  Francisco,  Calif. 

do 

do 

do 

do 

do 


$0.0125 
.015 
.0125 
.025 
.036 


$0. 025 
.02.5 
.025 
.035 
.0.50 


P(r  cent. 

58 


$0.01 
.02 


$0. 0.35 
.015 
.02 
.03 
.01 
.035 


Pir  cent. 
50 

80.0145  I      $0,025 
.028  .015 

.028    I  .015 

Per  cent. 
64 


$0.06,5 
.02 
.02 
.015 
.02 
.17 
Per  cent 
17 


$0. 07 
.03 


.03 

.025 

.03 

.18 


SO.  075 
.015 
.020 
.025 
.036 


SO.  03 
.025 
.035 
.035 
.050 


Per  cent. 
60 


$0.01 


$0,035 
.045 
.02 
.04 
.04 
.035 


Per  cent. 
50 

SO.  014  I        SO.  025 
.•028  .015 

.028  I  .045 

7Vr  cent. 
64 


$0. 065 
.02 
.02 
.015 
.02 
.17 
Per  cent 
17 


S0.07 
.03 
.03 
.025 
.03 
.18 


Source:  Interstate  Commerce  Commission. 


154 


ECCtXoMIC'S    OF   THH    COX.STRUCTIOX    JNl>USTi:Y. 


Ta  ill  K  Go. — Freiyhl  rales  on  crushed  sUnn'. 
I  Per  net  ton.l 


Froni- 


To- 


SiifTorn,N.  Y New  York 

Nvack,  N.  V ' do 

.Kifhinoiul  Hill,  N.  Y | do 

Nrw  I)iirhaiii,  N.,J j do 

Mf'iidcii,  Conn .....do 

Midillelield,  Conn do 

Mount  Carinel,  Coim i do 

KasI  Ilaven,  Conn do 

Average  decrease,  4.2  i>er  cent. 

KhnhnrsK  III Chieaao,  III 

Lenionl ,  III ' do 

.Vverage increase,  40  per  cent. 


Sacramento,  Calif. 
Oakland,  Calif 


T)i('<prson,  Md.. 
Mill  l-ane,  Pa... 
Norristown,  Pa. 
C.len  Wills,  Pa. 
Birdsboro,  Pa.. 

Clin''au,Pa 

Riislilaud,  Pa. 


S;i,n  California,  Calif 

do 

Avei'age  increase,  8  per  cent . 

Philadelphia,  Pa 

do 

do 

do 

do 

do 

do 

Pottstowii,  Pa I do. 

-V verage  increase,  76  per  cent . 


1919 


SI.  70 

S2.  .V) 

1.10 

l.6<) 

1.00 

i.V> 

1.30 

2.  <W 

2.40 

l.fiO 

2.40 

I.M 

2.20 

1.50 

2.20 

1.70 

.78 

1.00 

.40 

.62 

1.90 

2.  la 

,70 

.70 

1.00 

1.50 

.60 

.90 

.00 

.90 

.50 

.90 

.65 

l.OiJ 

.65 

I.IJI) 

.60 

."W 

.65 

2.  (ir, 

Source:  Interstate  Commerce  Commission. 


SECTION  XIII.  GLASS. 
Introduction. 

A  very  \'aluable  source  of  inforiuiition  on  the  subject  of  glass  is 
the  pamplilet  pubhshed  by  the  United  States  Tariff  Commission  iii 
1918  \\dth  the  title,  "The  Glass  Industiy  as  Affected  by  the  War." 

This  pamplilet  has  been  used  extensiveh'  iii  the  preparation  of 
this  brief  resume  of  the  subject. 

Production  of  glass  sand  and  glass. 

It  has  been  considered  advisable  to  present  some  figures  on  glass 
sand  as  well  as  on  glass,  especially  as  tliere  are  no  complete  tables  of 
figiu'es  on  glass  production  at  hand. 

The  figures  in  Table  64  on  production  of  glass  sand  indicate  a  con- 
tinued increase  in  production,  even  tiirough  the  year  1918,  which  is 
exceptional  among  the  production  figures  of  the  building  materials 
group.  The  reason  for  this  will  be  shown  later  to  lie  in  the  growth 
of  tlie  export  demand  during  the  war,  and  the  development  of  vaiious 
kinds  of  glass  which  were  essential  for  M'ar  piu'poses.  The  production 
figures  on  glass  sand  are  probably  fairly  indicative  of  the  growth  of  the 
glass  industry  in  the  United  States  during  the  period  covered  in  the  table. 

The  total  production  of  glass  in  this  country  in  1914  was  valued  at 
$123,085,019.  Taking  into  accoimt  the  increase  in  production  of 
glass  sand  and  the  relative  increases  in  prices  of  both  sand  and  glass 
during  the  period  1914-1918,  the  191S  production  may  be  veiy 
roughly  estimated  at  somewhere  in  the  neighborliood  of  $350,000,000. 

The  1914  product iDii  was  (iividcl  as  shown  on  following  page. 


E(!ONOMICS    OF   THE    CONSTEUCJTIOls    INDUHTllY. 

Glass  /jroduction  in  191  i. 


155 


Product. 


Square  feet. 


Value. 


.\  vera^e 

pnep  per 

square 

foot. 


Percent- 
age of 

total 
value. 


A\'!iiflow  glass 

Plate  glass,  polished 

Plate  glass,  rough 

Obscured  glass 

Wire  glass,  polished 

Wire  glass,  rough 

^Vllo/lier  buildmg  glass. 


Total  building  glass . 
\  1 1  other  glass 


400, 998, 893 

60,383,516 

131, 492 

43,040,079 

1,707,S18 

13,980,906 


.$17,495,956 

14, 773, 787 

25,859 

2,417,253 

534, 322 

1,056,612 

620, 280 


"  S2. 18 
.24 
.20 
.056 
.31 
.076 


14.22 
12. 02 
.02 
1.9S 
.44 
.86 
.42 


36,824,069 
86, 260, 950 


29.94 
70.0ft 


Total  glass . 


123,085,019 


100.00 


1  This  price  only  is  figured  for  50  square  feet:  all  the  others,  per  square  fool . 

Further  figures  have  lieen  given  on  production  of  plate  glass, 
being  estimates  made  by  the  Pittsburgh  Plate  Glass  Co.,  one  of  the 
leading  producers.     These  figiu'es  are  as  follows: 

Production  of  plate  glass  in  the  United  States. 


Year. 

Square  feel . 

Year. 

Sfiuarefeet. 

]!M4                                                           ..    .. 

60, 383, 516 
66, 600, 000 

19)7 

75, 000,  OOO 

19tli 

1918 

49.000.000 

The  decrease  in  production  in  1918  would  be  accounted  for  by  the 
decreased  demand  occasioned  by  inactivity  in  building.  The  1918 
figure  is  19  per  cent  imder  the  1914  figure.  Early  in  1919  it  was 
stated  that  the  plate-glass  industry  was  operating  at  about  50  per 
cent  of  normal  capacity. 

Early  in  1919  it  was  stated  by  a  prominent  glass  firm  that  during 
the  blast  of  1917-18  the  season's  total  output  of  window  glass  was 
about  6,300,000  50-foot  boxes.  This  would  be  a  total  of  815,000,000 
feet,  as  against  400,998,893  feet  for  the  year  1914,  a  decrease  of  21-i 
per  cent.  This  firm  anticipated  that  the  1919  production  of  window 
glass  would  be  about  the  same  as  that  of  1918. 

It  was  stated,  earlv  in  1919,  that  the  manufacture  of  iihim mating 
glassw^are  was  proceeding  at  about  60  per  cent  of  capacity. 

These  figures  all  show  a  decrease  in  production  of  building  glass, 
although  there  was  an  increase  in  production  of  glass  sand. 

The  destructive  effect  of  the  war  on  tlie  glass  industry  of  Belgium 
and  France  and  the  shutting  off  of  imports  from  Germany  and 
Austria  made  it  necessary  for  the  progressive  glass  manufacturers  of 
America  to  develop  processes  fo!r  the  manufacture  of  various  kinds 
of  glass  not  produced  commercially  in  this  coimtry  before  the  war. 
During  the  war  absolutely  new  branches  of  the  glass  industry  were 
developed  in  the  United  States  for  the  production  of  the  following 


156 


KCONOMICS    OF     rilK    <  O.XSTi;  Tf  TION    IXDl'STHY. 


articles:  Optical  goods,    lahoratoiy  or  cliomical    Avare,    glass    gauge 
tubing,  watch  crystals,  glazing  glass,  oven  glass,  glass  brick,  siphon 
l)ottles,  photographic  glass,  and  high-gnulc  picture  glass. 
Imports  and  exports  of  glass. 

Tn  addition  to  the  development  of  the  new  branches  of  the  glass 
in(histry,  as  referred  to  in  the  preceding  paragi-aph,  the  other  out- 
standing fact  in  the  industry  has  been  the  growth  of  the  export 
business. 

Raw  materials  used  in  the  domestic  production  of  glass  are  all 
produced  in  this  country,  and  consequently  do  not  figure  in  any 
consideration  of  exports  and  imports. 

In  1889  imports  of  glass  of  all  kinds  amounted  in  value  to  about 
19  per  cent,  and  exports  to  a  little  more  than  2  per  cent  of  the  total 
domestic  production.  In  1914  imports  for  consumption  amounted 
to  .18,219,112,  or  6.7  per  cent  of  the  total  domestic  production 
(S123,085,019);  and  exports  amounted  to  S3, 729, 623,  which  was  3 
per  cent  of  the  total  domestic  production. 

Imports  and  exports  for  the  years  1914  to  1917  are  shown  in  the 
following  tables: 

Glass  imporla  of  the  Un! led  Slates,  1914  lo  1917  fl 


Year. 

Window 
glas.s. 

Plato  gla.ss. 

Total 

Iniilding 

glass. 

Porcentaco 
total. 

Total. 

1914 

$1,356,218 
722, 483 
197,549 
328, 100 

?727, 889 

98, 171 

3,.V,3 

13, 406 

$2, 084, 107 
820, 6M 
201, 102 
341,596 

Per  cent. 

25.4 

17.9 

8.9 

86, 120, 6% 
3,771,705 
2. 047. 8a9 

$8,204,803 
4, 592, 359 

1915 

1916 

2, 249, 001 

1917 

15.4  1     1.883.582 

2,225,178 

' 

n  From  "  The  Gla.ss  Industry  as  Affected  by  the  War,"  U.  S.  Tariff  Commission,  1918. 
Glass  er ports  of  the  United  States,  1914  to  1917 fl 


Year. 

Window 

glass. 

Plate  glass. 

Total 

building 

glass. 

Percentage 

of  building 

glass  to 

total. 

All  other 

glass. 

Total. 

1914 

$311,339 
1,443,113 
3, 123; 911 
3, 483, 5% 

$35,767 

831,727 

1,568,181 

2,223,329 

S347, 106 
2, 274, 840 
4,692,092 
5, 706, 925 

Percent. 
9.3 

40.8 
38.0 
42.1 

S3, 382,  .517 
3;  283, 877 
7, 629, 241 
7,847,605 

S.3.729,623 
5,558,717 

1915 

1916 

12,321,333 

1917 

13,5^,530 

1 1'^'roin  "  The  01a.ss  Industry  as  Affected  by  the  War,"  I'.  S.  Tariff  Commission,  1918. 

From  these  tables  it  is  seen  that  the  1917  imports  had  decreased 
73  per  cent  from  1914,  while  exports  increased  263  per  cent  during 
the  same  period.  Imports  of  building  glass  dui'ing  this  period 
decreased  83  per  cent,  while  exports  in  1917  were  16 J  times  the  1914 
figure. 


ECOXOAIICS   OF   THE    COXSTRUCTIOX    INDUSTRY.  157 

The  prexvjir  glass  trade  was  mainly  domestic,  and  it  is  only  sinc« 
the  war  began  that  the  export  trade  developed  into  a  factor  of  con- 
siderable importance.  Belgium  was,  before  the  war,  the  greatest 
exporter  of  window  and  plate  glass  to  this  country.  France,  Ger- 
many, and  Austria-Hungary  were  also,  in  the  past,  large  exporters 
of  glass  products.  The  development  of  our  trade  has  been  largely 
the  result  of  the  cutting  off  of  supplies  of  glass  from  these  countries. 

In  a  commercial  report  from  Consul  General  Robert  B.  Skinner, 
of  London,  dated  November  25,  1918,  it  was  stated  that  the  supply 
of  glass  in  England  was  very  low,  and  that  it  would  be  a  considerable 
time  before  production  could  return  to  normal.  American  glass 
producers  have  expected  to  find  extensive  markets  for  their  products 
in  the  European  countries  as  soon  as  normal  trade  and  building 
activities  are  reestablished  in  those  countries.  They  have  antici- 
pated further  development  of  export  business  and  a  maintenance 
of  comparatively  high  prices  on  glass  as  a  consequence  of  the  world 
shortage  of  this  material. 

The  price  record. 

Records  of  prices  on  glass  sand,  window  glass,  and  plate  glass  are 
given  in  Tables  65  and  66.  The  figures  on  sand  are  given  as 
representing  the  principal  raw  material  from  which  glass  is  made. 
The  composite  indices  on  window  glass  are  simple  averages  of  the 
indices  of  the  four  price  series,  and  those  on  plate  glass  are  simple 
averages  of  the  indices  of  the  two  series  on  that  product. 

The  final  indices  for  the  last  quarter  of  1918  are  272  for  glass  sand, 
169  for  plate  glass,  and  307  for  window  glass.  If  the  figures  for 
plate  glass  and  window  glass  be  combined,  according  to  their  rela- 
tive importance,  a  composite  index  of  244  is  obtained,  which  might 
be  said  to  indicate  the  price  level  of  building  glass  for  the  last  quarter 
of  1918. 

The  April  figures  show  a  iise  of  9^  per  cent  on  plate  glass  over  the 
last  quarter  of  1918  and  a  decline  of  13.3  per  cent  on  window  glass 
prices;  the  April  indices  being  185  and  266,  respectively. 

A  composite  building-glass  index  for  April  would  be  229,  which  is 
6  per  cent  less  than  the  figure  for  the  last  quarter  of  1918. 

Cost  of  production. 

In  addition  to  the  two  factors  described  above  which  have  made 
for  rises  in  prices  of  building  glass,  there  was  a  third,  of  equal  if  not 
gi'eater  importance,  the  increase  in  cost  of  production. 

The  price  figm'es  on  glass  sand  give  an  indication  of  the  rise  in 
costs  of  raw  materials.  This  material  constitutes  about  52  per  cent 
of  the  total  raw  materials  used. 

One  item. of  increased  expense  was  that  ol  the  fire  clay  used  in 
making  tank  furnace  blocks  or  pots  in  which  the  glass  is  melted. 


158 


ECONOMICS   OF   THE   CONSTRUCTION   INDUSTRY. 


Formerly  a  very  lii<:;b  {^radr  of  clay  was  inijiorli'd  from  Clermaiiy 
for  this  purpose.  Aft(M-  this  supply  was  cut  (»(T  domestic  clay  had 
to  he  substituted.  An  important  manufacturer  stated  that  the  pots 
and  blocks  made  from  tlie  domestic  fire  clay  do  not  hist  so  long  as 
those  made  from  the  imported  (;lay,  which  results  in  a  fpeat  increase 
in  the  cost  of  replacement  and  also  in  the  cost  of  production. 

Comparative  figures  on  wages  in  three  branches  of  building-glass 
pioduction  aie  shown  in  the  following  tables,  taken  from  the  Tariff 
Commission's  pamphlet: 

Conparaliie  figures  on  vages  in  three  branches  of  bmlding^glass  pro/hirtiov.. 
WINDOW  OT,ASS,  HAND  AND  MACHINE. 


Oocupalion. 

Ave r:\Kp  earnings 
jx'r  week. 

Per  c«int 
of 

1011 

1917 

1914-1917. 

$25.  00 
34.74 
27.83 
42. 17 
13.  .50 
15.  M 
13.30 
13.03 
10.23 
11.11 

^n.no 

50.13 
39.fi5 

ss.n 

20.00 
21.10 

2i.ri0 

17. 95 
19.80 
15.  75 

60.0 

44.3 

C.ntherer'                                    

42.4 

27.  'i 

4S.2 

34.9 

62.4 

37.7 

Couunon  laboreis,  machme 

U3.5 

41.7 

1 

49.3 

PLATE  GLASS— AVERAGE  EARNINGS  PER  HOUR,  1914-1917 


Occupation. 


Average  earnings 
per  hour  (cents). 


Per  cent 
of 

Increase, 
1914-1917. 


Casting  depart  raent 

Grinding  doparl  uient 

Polisliing  dt'V>art  raent . . . 
Pot-iualcing  department . 
Yai'd  labor 


23. 5 
20.0 
10.0 
20.5 
15. 5 


34.5 
30.5 
27.5 
33.3 
27.5 


4o.S 
52.5 
71.9 
63.4 
77.4 


Average  increase . 


tvj.  4 


WIRE,  OBSCl-RED,  AND  ROUGH-ROLLED  GLAS.S 


Occupation. 

Average  earnings 
per  bom-  (cents). 

Per  cent 

Of 

1914 

1917 

1914-1917. 

Machine  tenders 

24.2 
23.7 
20.4 
26.5 
37.0 
18.2 

37.0 
35.5 
29.  S 
37.5 
47.0 
30.3 

52.7 

Furnace  chargers 

49.7 

Batch  mi.xers .     -    

46.1 

Ladlers 

41.5 

Cntters 

27.0 

Common  laborers 

68.3 

Average  increase .                                       

47.2 

ECONOMICS    OF   THE    COaSTSTRUCTIOX    INDUSTRY.-  159 

The  average  of  all  these  increses  is  51.8  per  cent.  These  figures,  it 
should  be  noted,  show  the  increase  to  1917  only. 

Some  further  figures  on  increases  in  production  costs  have  been 
furnished  to  this  division  by  two  important  manufacturei-s  of  plate 
glass.     These  figures  are  as  follows: 


Element  of  cost. 

Increase,  191S  over 
1913. 

First 
manu- 
facturer. 

Second 
manu- 
facturer. 

Labor 

Per  cent. 
72 
71 
141 
39 
81 

Per  cent. 
90 

125 

Fuel 

.51 

27(» 

Total  production  cost . . . 

80 

IM 

a  Not  available. 

The  first  manufacturer  also  stated  that  during  the  years  1914  to 
1918,  inclusive,  long  freight  hauls  were  eliminated  where  possible 
and  careful  attention  was  given  to  material  stocks,  with  the  result 
that  the  increase  in  manufacturing  cost  was  not  parallel  with  the 
increases  in  prices  of  raw  materials,  wages,  and  rates. 

No  figures  are  available  on  production  costs  in  the  window  glass 
industry  for  1918. 

Early  in  1919  a  leading  manufacturer  in  the  illuminating  glassware 
business  stated  the  prices  of  his  product  were  not  unduly  high,  con- 
sidering production  costs,  and  were  not  due  to  drop.  High  production 
costs  were  attributed  partl}^  to  increased  wages,  but  in  greater  part 
to  increased  cost  of  materials  which,  it  was  stated,  ran  from  100  to 
300  per  cent  above  1914  prices. 

Table  64. — QuanlUy  and  value  of  glass  sand  produced  in  the  Untied  Slates.  1909-1919. 
[Figures  from  U.  S.  Geological  Survpy.] 


Year.';. 

Quanlity. 

Value. 

Averace 

price  per 

Ion. 

K.'hilive 
price  .a 

A  verage  190S-1912 _ 

1913 

Short  ton.t. 
1,332,539 

1,791.800 
l,G19,fi49 
1.884.044 
2,018,317 
1,942,075 

I , 851 , 297 

2,300,000 

$1,357,778 

1,895,991 
1,568,030 
l.«0(i,(M0 
1 , 9.57. 797 
2, 68.5, 014 

1 ,  942,  (i94 

4,200,000 

$1.03 

1.0.-, 
.97 
.85 
.97 

1.3S 

1.05 
1.83 

li>» 
104 

1914 

95 

1915 

8:t 

191G 

9". 

1917 .                               

135 

Avprnge  11TI.VI917 

1918  ft 

H) 

a  Base:  Average  prices  1913  and  1914,  $1.02—100. 

b  1918  figures  roughly  estimated  by  Division  of  Public  Works  and  Construction  Development. 


KiO 


ECONOMICS    OK    TlIK    ('()XSTHr( 'TION    INDT'STHY. 


Taim.io  ()'). —  Whnle.fiiile  prices  on  iiUm-f  atiml  mul  n'lndoir  '/Ihsh. 
[(iuotutions  from  price  section,  War  Industries  Board.] 


roinmodily. 


Market. 


Period. 


July  1, 1913,  to  June  30, 1914. 

1013 

1914 


1916. 
1917. 
1918. 

1917: 


First  quarter... 
Second  quarter. 
Third  quarter. . 
Fourtli  quarter. 


1918: 


First  quarter... 
Second  quarter. 
Tliird  quarter.. 
Fourth  quarter. 


19: 


First  quarter. 
April 


lass  sand. 


Maryland. 


Price  per 
short  ton. 


SI .  22.50 
1.2500 
1.2000 
1.2000 
1.258.3 
1 .  93.33 
3.1875 


1..5000 
1.8167 
2.0000 
2.4167 


2.9167 
3.0833 
3,4167 
3.3333 


Relative 
price. 


100 
102 
98 
98 
103 
1.58 
200 


122 
148 
163 
197 


238 
252 
278 
272 


Window  glass. 


.Single,  United, 
inches  40-A. 


New  York. 


Price  per 

60  square 

feet. 


S2.  5500 
2.5000 
2.  .5500 
2. 80.50 
:',.  4(5.50 
4.. 5.3.53 
6. 7903 


3.9600 
4.1800 
4.6200 
5.3812 


6.0412 
6.  GOOO 
6.  9:jOO 
7.5900 


7.. 5900 
6.  6000 


Relative 
price. 


100 
100 
100 
110 
1.36 
178 
266 


155 
164 
181 
211 


237 
259 
272 
298 


298 
259 


Window  class 


Commodity. 


Double,  United, 
inches  40-A. 


Single,  United, 
inches  40- B. 


Double,  United, 
inches  40-B. 


Market. 


New  York. 


Period. 


Price  per 

50  square 
feet. 


Relative 
price. 


New  York. 


Price  per 

50  square 

feet. 


Relative 
price. 


New  York. 


Price  per 

SOsquare 

feet. 


Relative 
price. 


July  1,  1913,  to  June  30,  1914 

1913 

1914 

1915 

1910 

1917 

1918 

1917: 

First  quarter 

Second  q  uartcr 

Third  quarter 

Fourth  quarter 

1918: 

First  q  uarter 

Second  quarter 

Third  quarter 

Fourth  quarter 

1919: 

First  quarter 

-\pril 


$3. 6400 
3. 6400 
3. 6400 
3.  SSOO 
5. 912.5 
7.  .55.SS 

10. 9505 


6.6000 
6. 9667 
7.  71KK) 
8.9687 


10.0fi,S7 

ll.lKHKI 

ll.lsiS 
11.5500 


10. ISOO 
9.3200 


100 
100 
100 
107 
102 
208 
301 


182 
192 
212 
246 


276 
302 
307 
317 


279 
253 


$1.9550 
1.9550 
1.9550 
2. 6350 
2.7125 
3.6167 
6. 1204 


3.1000 
3.3067 
3.7200 
4.3400 


4.9042 
5. 9375 
6.5100 
7. 1300 


7.1300 
6.2000 


100 
100 
100 
135 
139 
185 
313 


158 
169 
190 
222 


251 
.304 
334 
364 


364 
317 


$3.3200 
3.3200 
3-3200 
3.5600 
4.72S.S 
5.9473 
8.4423 


5.3350 
5.5533 
5.9898 
6.9113 


7.7374 
8. 4681 
8. 6249 
8.9386 


S.2O00 
7.7700 


100 
100 
100 
107 
142 
179 
254 


161 
168 
181 

208 


2.33 
255 
260 
269 


247 
234 


Note.— Figures  for  1919  from  Oil,  Paint,  and  Drug  Reporter. 


ECONOMICS    OF   THE    CONSTRUCTIOX    INDUSTRY. 


161 


Table  66. —  Wholesale  'market  prices  o-it  ylass. 
[Quotations  from  price  section,  AVar  ludusiries  Board.] 


Commodilj- 


Market. 


Plate  glass. 


Polished  slazing  area, 
5-10  square  feet. 


New  York. 


Polished  plazing  area, 
3-5  square  feet. 


New  York. 


Composite  indices. 


Plate 

glass. 


New 
York. 


Window 
glass. 


New 
York. 


Period. 


Price  per 

square 
foot. 


July  1,  1913,  to  June  30,  1914 

1913 

1914 

1915 

191(! 

1917 

1918 

1917: 

First  quarter 

Second  quarter 

Third  quarter 

Fomth  quarter 

1918: 

First  quarter 

Second  quarter 

Third  quarter 

Fourth  quarter 

1919: o 

First  quarter 

April 


$0. 3008 
.  3183 
.  2908 
.  2533 
.  3375 
.392.5 
.4525 


.3800 
.3800 
.4000 
.4100 


.4200 
.  4300 
.  4(i(;7 
.4933 


.  5233 
.5400 


Relative 

price. 


Price  per 

square 
foot. 


Relative 

price. 


Average 
of  2 

series. 


100 
106 
97 
84 
112 
130 
1.50 


125 
125 
133 
130 


140 
143 
1.55 

104 


174 
179 


.2208 
.  2307 
.2108 
.1807 
.2917 
..3400 
.  3608 


.3400 
.3400 
.3400 
.3400 


.3400 

.  3467 
.  3700 

.  3867 


.4100 
.420*) 


100 
107 
95 
85 
132 
1.54 
163 


154 
1.54 
1.54 
154 


154 
157 
168 
175 


i.sr, 

190 


100 
107 
96 
85 
122 
142 
157 


140 
140 
143 
145 


147 
150 
161 
169 


1.80 
185 


Average 

of  4 

series. 


100 
100 
100 
100 
147 
189 
282 


166 
174 
192 
2.33 


251 

279 
290 
307 


297 
266 


u  Figures  for  1919  from  Oil,  Paint,  and  Drug  Reporter. 

SECTION  XIV.  PAINT  MATERIALS. 
Introduction. 

Paint  materia.s  are  so  closely  allied  to  drugs  and  chemicals,  and  so 
many  of  these  materials  are  imported  that  any  comprehensive  study 
of  them  would  go  beyond  the  scope  of  this  report.  The  yearbooks 
of  the  Oil,  Paint,  and  Drug  Reporter  contain  much  information  that 
is  valuable  on  this  subject. 

Production  jBgures. 

From  the  figures  on  linseed  oil  (Table  67)  it  is  seen  that  the  gi'oss 
supply  in  1917  was  131  per  cent  under  1916.  In  1918  the  gross  sup- 
ply was  12§  per  cent  under  1917. 

Turpentine  for  the  year  ending  April  1,  19 IS,  was  11 1  per  cent 
below  the  production  for  the  previous  je&r.  (See  Table  68.)  For 
the  year  ending  April  1,  1919,  the  estimated  figure  is  .36^  per  cent 
less  than  for  the  i)receding  year. 

There  are  not  at  hand  figures  on  production  of  white, lead  or  zinc 
oxide.  Figui-es  on  lead  and  zinc  are  therefore  given  in  their  places 
(Table  69). 


1212[)7' 


-10- 


-11 


1  02  ECONOMICS   OF   THE   CONSTRUCTIOIT  INDUSTRY. 

The  total  supply  of  lead  in  1918  was  nearly  10  per  cent  under 
I  he  li^uro  for  the  year  1917.  Zinc  in  1918  was  about  16 J  jier  cent 
under  the  1917  figure.  Lead  and  zinc  compounds  available  for  use 
as  paint  materials  probably  declined  even  more  than  this,  since  other 
compounds  were  much  in  demand  for  war  uses. 

Review  of  paint  and  varnish  business  during  the  war. 

In  addition  to  the  conditions  of  lessened  demand  due  to  inactivity 
in  building,  paints  and  varnishes  were  subject  to  the  uncertainties 
of  import  trade  and  to  the  restrictions  on  this  trade  imposed  by  the 
War  Trade  Board.  Many  of  the  varnish  materials  were  in  great 
demand  for  war  purposes.  Many  paint  pigments  suffered  consider- 
able reductions  in  jjroduetion,  due  to  the  demands  for  allied  chemical 
products. 

The  following  is  quoted  from  the  Oil,  Paint,  and  Drug  Reporter 
1918  Yearbook  as  summarizing  the  conditions  m  the  paint  industry 
during  1918: 

Every  branch  of  the  paint  industry  during  the  year  1918  was  affected  by  the  same 
general  conditions.  In  many  different  branches  there  were  peculiar  conditions,  l>ut 
this  does  not  alter  the  truth  of  the  statement  that  general  conditions  affected  all 
branches  of  the  industry  in  very  much  the  same  manner.  In  the  first  place,  there  was 
to  l>e  considered  a  greatly  increased  cost  of  production,  due  in  part  to  the  highei-  cost  of 
labor  and  in  part  to  the  higher  cost  of  raw  materials.  In  some  instances  the  higher  cost 
of  raw  materials  was  the  result  of  the  higher  labor  cost,  and  in  some  cases  a  result  of  the 
shutting  off  of  foreign  supplies.  High  costs  from  any  reason  results  in  decreased  con- 
sumption :  but  xmder  war  conditions  the  decrease  in  consumption  incident  to  high 
\  iilues  was  not  nearly  as  important  a  matter  as  the  decrease  in  consumption  which  the 
Government  found  it  necessary  to  arbitraiily  command  in  order  that  men  and  material 
might  be  availal^le  for  the  Avar  uses  of  the  Government. 

The  restrictions  upon  general  building  operations  were  such  as  to  make  the  general 
domestic  demand  almost  nil.  The  orders  that  came  in  from  the  GoA-emment  for 
actual  war  work  were  what  ser\ed  to  keep  the  trade  going  during  most  of  the  yeai'. 
When  hostilities  finally  ceased — at  a  time  when  the  Government  consumption  was  at  its 
highest  point — the  paint  industry  was  largely  working  for  the  Government.  It  was 
Government  demand  that  made  it  possible  for  the  industiy  to  continue  in  business 
at  a  time  when  war  conditions  were  affecting  the  industry  in  every  direct  and  indirect 
manner  conceivable. 

The  Government  needed  lead.  This  fact  forced  an  advance  of  lead  pigments. 
The  Grovernment  needed  acids  used  in  the  manufacture  of  certain  diy  colors.  There- 
fore, acids  only  became  obtainable  to  color  makera,  if  at  all,  at  unusual  prices.  So  it 
w:i3  ^nth  other  materials.  To  offset  this  the  GoA-emment  was  a  very  heavy  consumer 
of  almost  eA'erything  the  trade  produced,  and  it  was  willing  to  pay  the  prices  Avhich 
were  forced  by  the  situation. 

There  was  no  opportunity  for  the  consumption  of  much  paint  and  paint  materials 
in  new  priATite  construction  work,  because  this  work  was  practically  confined,  by 
Government  regulations,  to  essential  war  construction.  The  high  cost  of  material 
made  it  inadvisable  for  repainting  to  be  done,  and  the  whole  industry — when  the 
fighting  ceased— was  doing  its  bit  by  deliAering  as  promptly  as  posr^ible  on  Govern- 
ment orders  and  neglecting  general  business. 

WTien  the  armistice  came  there  was  no  industry  which  more  quickly  recognize*! 
that  the  period  of  a  return  to  normalitj' must  be  a  long  one.     There  was  no  attempt 


EC0KOMIC3   OF   THE   COXSTKUCTIOIS"   INDUSTRY.  1G3 

made  to  force  conditions  which  permitted  of  no  forcing.  There  was  no  sudden 
let-up  in  Government  ordera  for  this  sort  of  goods,  as  there  was  in  some  used  for  more 
warlike  purposes.  There  was  a  decrease  in  Go\ernment  consimiption  from  the  day 
the  fighting  ceased,  but  the  decrease  was  a  fairly  gradual  one.  The  fact  that  the 
Government's  ambitious  shipbuilding  plans  were  to  be  carried  out,  at  least  to  a 
very  large  extent,  made  the  Government  continue  to  be  a  heaw  consumer  of  many 
sorts  of  paints  and  paint  materials. 

In  most  lines  there  was  no  canceling  of  contracts  pre%'ioiisly  placed.  At  the  same 
time  there  was  no  immediate  improvement  in  the  general  domestic  dem.and — nor  ^\as 
such  a  thing  expected.  Most  consumers  looked  for  lower  prices  as  a  result  of  the  end 
of  the  war,  and  were  therefore  inclined  to  withhold  orders  waiting  for  the  price  read- 
justment they  so  confidently  anticipated.  This  position  was  a  uatuial  and  logical 
one,  and  yet  conditions  were  all  against  sudden  price  changes.  The  result  was  that 
the  closing  weeks  of  the  year  saw  a  verj^  dull  market. 

The  war  was  over,  the  restrictions  were  being  rapidly  withdrawn,  the  outlook  for 
an  active  domestic  and  export  business  was  good,  and  yet  it  was  not  a  time  to  attempt 
to  force  matters,  more  especially  not  a  time  to  in\dte  demoralization  by  sudden  radical 
changes  based  upon  future  possibilities.  The  end  of  hostilities  was  foUowed  by  a 
decline  in  the  price  of  pig  lead  and  some  other  basic  raw  materials  in  the  paint  indus- 
try, but  there  was  no  reduction  in  the  cost  of  labor — a  most  important  matter  in  all 
lines — and  none  was  looked  for. 

The  producer,  the  middleman,  and  the  retailer  have  l^een  waiting  since  the  close  of 
the  active  warfare  in  Europe  for  the  ultimate  consumer  to  begin  to  express  Ms  needs 
in  orders.  The  ultimate  consiuner  has  beeen  waiting  for  a  price  readjustment  to  meet 
his  views  of  the  situation.  There  has  been  no  possibilitj'  of  an}'  action  that  would 
force  the  situation,  but  the  fact  that  there  was,  as  a  rule,  no  accumulation  of  stocks 
in  any  hands  was  a  very  strong  feature  of  the  situation.  The  producer  was  not  stocked 
up.  He  had  been  working  for  the  Government  to  a  gieat  extent,  and  the  Govern- 
ment did  not  refuse  delivery  on  its  orders  as  a  rule.  The  middleman  had  no  incentive 
to  accumulate  stocks.  The  retailer,  if  he  was  at  all  a  merchant,  had  a  chance  to  sell 
his  stocks  clean  at  good  profits,  so  that  when  the  demand  starts  it  will  be  reflected 
with  wonderful  promptness  from  the  consumer  to  the  producer  or  importer  of  the 
basic  raw  materials  of  the  trade. 

A  re\'iew  of  the  prices  of  the  years  means  little  as  a  basis  of  comparison  of  normal 
values  because  general  conditions  have  goA'erned  the  entire  market.  These  condi- 
tions were  of  so  unusual  a  natiue  that  they  ^vill  never  be  known  again,  and  iu  eack 
sepamte  item  of  the  trade  there  ha^■e  been  peculiar  conditions,  now  forever  things  of 
the  past. 

The  price  record. 

The  price  record  of  paint  and  varnish  materials  is  shown  in  Tables 
70  to  76. 

It  is  interesting  to  note  that,  up  to  the  last  quarter  of  191S,  basic 
lead  carbonate,  dj-y,  had  increased  87  per  cent;  linseed  oil,  228  per 
cent;  and  white  lead  hi  oU,  106  per  cent. 

vSimilarly,  it  is  noted  for  the  same  period  that  whiting  advanced 
178  per  cent;  linseeed  oil,  228  per  cent;  and  putty,  309  per  cent. 

Two  series  of  figures  are  given  on  turpentine,  one  for  the  New 
York  market  and  one  for  the  Savannah  market.  The  difference  ill 
prices  between  the  two  markets  is  probably  due  entirely  to  the 
transportation  charges.     In  the  New  York  market  turpentine  is  seen 


164  H(;()N()MI('S    OF   THE    CONSTRXTCTION    INDUSTRY. 

to  have  advanced  Gl  per  cent  up  to  the  last  quarter  of  191S,  while 
the  advance  was  only  51  per  cent  m  the  Savannah  market. 

The  composite  index  figures  shown  in  the  last  column  of  Table  76 
arc  weighted  averages  computed  by  the  price  section  of  the  War 
Industries  Board,  as  representing  the  general  rise  for  the  entire  group 
of  paints  and  varnishes. 

The  1918  price  record  for  linseed  oil  is  very  clearly  set  forth  in 
the  following  statement  taken  from  the  1918  Yearbook  of  the  Oil, 
Paint,  and  Drug  Reporter: 

As  a  period  of  high  prices,  the  year  1018  will  be  long  remembered  in  the  linseed 
oil  trade.  Quotations  advanced  steadily  each  month  from  the  start  of  the  year 
until  the  peak  of  the  rise  had  been  reached  in  August  and  prevailed  until  well 
along  in  September.  Shutting  off  imports  of  linseed  from  the  Argentine  by  the  Gov- 
ernment in  its  desire  to  conserve  shipping  space  for  troop  and  supply  movements 
to  Europe,  was  the  principal  factor  in  bringing  about  the  record  price  condition. 
\\Tiile  it  was  true  that  all  imports  of  the  seed  had  not  been  absolutely  cut  off,  cargoes 
being  allowed  to  be  brought  in  if  proper  licenses  had  been  procured,  it  was  true  that 
no  licenses  were  obtainable  unless  the  prospective  licensee  could  show  that  he  had 
obtained  actual  shipping  space  for  bringing  in  of  the  cargo.  The  finding  of  shipping 
space  was  so  difficult  a  matter  as  to  make  the  movement  of  the  seed  from  the  .South 
American  country  almost  negligible  so  far  as  Iceeping  abreast  of  actual  requirements 
was  concerned.  Steamships  were  entirely  out  of  the  c|uestion  and  as  a  result  the  move- 
ment to  this  country  was  made  wholly  and  solely  by  means  of  sailing  vessels.  These 
were  of  rather  limited  cargo  capacity  at  best. 

Up  to  the  close  of  hostilities  the  needs  of  the  Government  were  so  great  that  the 
amount  of  oil  available  for  the  general  trade  was  very  limited,  and  there  was  no 
exportation  of  oil  permitted.  The  end  of  hostilities  found  crushers  with  very  small 
stocks  of  either  seed  or  oil  on  hand,  and  there  was  not  much  oil  in  the  hands  of  mid- 
dlemen. 

The  quantities  of  linseed  received  from  Argentina  were  about  sufficient  to  supply 
the  current  needs  of  the  oil  crushing  mills  in  the  Eastern  States,  while  the  seed  from 
Canada  and  the  Northwest  had  taken  care  ©f  the  immediate  demands  of  the  Western 
crushers.  The  receipt  of  linseed  from  the  North  Dakota  fields  was  delayed  by  early 
snows  which  bmied  the  flax.  In  some  sections  indications  were  that  the  snow  might 
prevent  the  threshing  of  linseed  until  the  spring  of  1919. 

The  beginning  of  the  year  saw  the  cai"-lot  price  at  $1.28  a  gallon.  This  was  the  low 
price  of  the  year.  By  the  middle  of  ^larch  the  price  had  advanced  to  SI. 55  a  gallon. 
This  price  was  the  highest  ever  known  in  the  history  of  the  trade ;  but  it  did  not  remain 
a  record  price  very  long.  By  the  end  of  June  the  price  had  advanced  to  $1.G0.  The 
end  of  July  saw  it  $1.84,  and  early  in  August  it  went  to  the  extreme  price  of  ?1.90 — 
holding  at  that  level  until  the  middle  of  September. 

An  order  forbidding  imports  created  much  consternation  in  the  trade.  The  pro- 
tests that  followed  resulted  in  a  close  investigation  by  the  authorities  in  Washington 
into  the  whole  industry.  The  crushes  turned  over  to  the  Government  a  complete 
statement  giving  all  the  inside  facts  of  their  business,  and  the  showing  made  the 
shortage  of  oil  so  apparent  that  there  never  was  a  time  when  licenses  to  import  could 
not  be  obtained. 

The  linseed  requirements  of  this  country  for  the  1918-19  fiscal  period  were  given  as 
2C>,000.000  bushels  in  the  report  of  the  linseed  oil  committee  of  the  National  Paint, 
Oil  and  Varnish  Association  at  the  convention  of  this  organization  in  Boston,  Decem- 
ber 2-4,  1918.  Of  the  required  amount,  10,000.000  bushels  were  expected  from  the 
American  Northwest,  but  the  official  estimate  of  the  linseed  crop  in  the  United 


ECONOMICS    OF   THE    CONSTRUCTION    INDUSTRY. 


165 


States  was  14,057,000  bushels.  More  than  11.000.000  bushels,  therefore,  must  be 
obtained  from  Canada,  India,  and  Argentina.  A  government  order  for  500.000 
bushels  from  India  was  announced. 

In  view  of  an  estimated  export  surplus  of  800.000  tons  or  31,000.000  bushels  of  lin- 
seed from  the  1918-19  crop,  Argentina  faced  a  declining  market  wath  the  signing  of 
the  armistice.  This  had  been  preceded  by  wDd  fluctuations  in  October,  due  to 
rumors  of  coming  peace,  and  assurances  of  a  bumper  crop. 

\Mien  the  price  of  oil  went  to  $1.90  a  gallon  in  the  United  States  demand  was  stopped, 
except  for  oil  that  had  to  be  had  at  any  price.  It  was  impossible  to  bring  down  the 
price  at  once  in  the  way  that  consumere  seemed  to  expect.  The  result  was  that  in  the 
latter  part  of  the  year  trade  was  very  slow.  Early  in  October  there  was  a  price  of 
11.60,  and  one  day  that  was  cut  to  $1.50.  There  was  considerable  business  done  at 
this  level.  The  price  was  then  jumped  back  to  $1.00.  The  end  of  the  year  found 
it  was  $1.55,  or  about  where  it  was  early  in  April. 

Eastern  crushers  were  forced  to  store  the  cake  and  meal  they  would  have  found  an 
active  foreign  market  for  under  normal  conditions.  The  end  of  the  year  found  stoclvs 
of  oil  in  all  hands  small,  few  contracts  for  future  delivery  on  the  books  of  the  pro- 
ducers, and  the  trade  still  buying  only  what  the  day-to-day  necessities  of  the  busi- 
ness forced  them  to  purchase  on  the  spot. 

Table  67. — Production  figures  on  linseed  oil  in  the  United  States. 
[Unit:  Gallon.    Figures  from  War  Industries  Board.] 


1916 


Domestic  production 60,083.000  ;  58,095.000     71,816,000     68,371,000     57,224,000     50,060,133 

Imports 162,000  1        580,000  88,000'        101,000  84,000  26,133 


Gro,ss  supplv '  60, 245. 000 

Exports j    2, 299, 000 


58,675,000 
266,000 


71,904,000  I  66,475,000 
1,497,000  !        881,000 


57,308,000 
1,539,000 


50, 086, 266 
774, 133 


Net  supply !  57, 946, 000     58, 409, 000     70, 407, 000  i  65, 651, 000     55,769, 000     49, 312, 133 


a  Figures  for  1918  from  Bureau  of  Markets. 

Table  68. — Production  figures  on  turpentine  in  the  United  States. 
[Figures  from  Kaval  Stores  Review  and  Journal  of  Trade,  April  6,  1919.] 


Year  ended  April  1 — 


Number  of 

50-gallon 

casks. 


Year  ended  April  1- 


1913 680,000  191/ 

1914 6)0.000  !  1918. 

1915 :  512,000  j  1919. 

1916 470,000 


Number  of 
50-gaHoQ 

Casks. 


535,000 

473,551 

a  299, 688 


a  Estimated. 

Table  69. — Production  figures  on  lead  and  zinc,  1914-1918. 
[Quantities  in  short  tons.    Figures  from  Oil,  Paint,  and  Drug  Reporter  1918  Yearbook.] 


Lead. 

Zinc. 

Year. 

Domestic 
production.!! 

Imports.6 

Total 
supply. 

Domestic 
production.f 

Imports.rf 

Total 
supply. 

1914                           

.522,864 
601,417 
622, 967 
651,1.56 
563,000 

28, 338 
51,496 
35. 330 
78,272 
95,940 

5.51,202 
652,913 
658,297 
729,428 
658,940 

406,9.59 
.586,491 
702,610 
711,192 
627,000 

1 
12,132            419,191 

1915 

57,669            644,160 

1916 

148,147            850,757 

1917 

■72,474             7S3.666 

1918 

24,200  i          651.20C 

0,  Lead  content  ofore  mined  in  the  T'nilod  States. 

b  Lead  content  ofore,  liiiUioii,  and  refineil  lead  imported  into  the  United  States. 

c  Recoverable  zinc  content  of  ore  mined  in  the  United  States. 

d  Zinc  content  of  ore  imported  into  the  United  States. 


l(j(;  E(;ONOMI(;S   OF   THE   dON.STUUCTIOX   INDUSTRY. 

'r.un.i;  70.      WholcKcle  iiitirl-cl  prlrea  on  jxiint  pi(iTnenls,  drti  crtlorx. 
[Quotations  from  price  section,  War  Industries  Board.] 


Commodity 

Bone  black. 

Chrome  green. 

Chrome 
yellow. 

(>cher. 

Paris 

green. 

A).|rl:ol 

New  York. 

New  York. 

New  York. 

New  York. 

New 

york. 

Period. 

Price 
per 

pouud. 

Rela- 

ti\e 

price. 

Price 
per 

pound. 

Rela- 
tive 
price. 

Price 
per 

pound. 

Rela- 

tx\e 
price. 

Price 
prr 

ton. 

Rela- 
tive 
price. 

Price 
per 

pound. 

Rela- 
tive 

I>rice. 

July  1, 1913,  to  June  30, 1914 

1913 

19M 

1915 

$0.0225 
.0225 
.  0225 
.0225 

.o;«i9 

.0400 
.0475 

.0400 
.0400 
.0400 
.0400 

.0400 
.0400 
.ft550 
.0550 

.0550 
.0550 

100 
100 
100 
100 
164 
178 
211 

178 
178 
178 
178 

178 
178 
244 
244 

244 
244 

80. 1700 
.1700 
.1825 
.2375 
.4875 
.3400 
.3950 

.4000 
.3200 
.  3200 
.3200 

.3333 

.3667 
.4500 
.4300 

.3766 
.3500 

100 
100 
107 
140 
286 
200 
232 

236 

188 
188 
188 

196 
216 
265 
253 

221 
205 

80.1100 
.1100 
.  1000 
.  1190 
.2875 
.2413 
.2742 

.2500 
.2367 
.2400 
.2383 

.2333 
.2633 
.3000 
.3000 

.  2800 
.2500 

100 
100 
99 
108 
261 
219 
249 

227 
215 
218 
217 

212 
239 
273 
273 

254 
227 

$12.0000 
12.0000 
12.0000 
13.0000 
18.  8333 
21. 3333 
30.0000 

20.0000 
20.0000 
21.3:'.33 
24. OOOO 

30.0000 
30.0000 
30. OOOO 
30.0000 

30.0000 
30.0000 

100 
100 
100 
108 
157 
17S 
250 

167 
167 
178 
200 

250 
2.50 
2.50 
250 

2.>0 
2.50 

.$0.1167 
.1242 
.  1133 
.  1263 
.2700 
.3900 
.41,83 

.2600 
.4200 
..50IX) 
.3800 

.42.33 
.4300 
.  42U0 
.4000 

..3900 
.3700 

lOO 
107 
97 

lO^ 

1916 

1917 

1918 

162 
335 
359 

1917: 

P'lrst  quarter 

22J 

Second  quarter 

369 

Tliird  quarter 

429 

Fourth  quarter 

1018: 

First  quarter 

-in 

363 

Second  quarter 

Third  quarter 

Fourth  quarter 

First  fjuarter 

36» 

360 
343 

334 

April 

SIT 

a  Figures  for  1919  from  Oil,  Paint,  and  Drug  Reporter. 

'P.\.BLE  71. — Wholesale  market  prices  on  paint  pigments,  dnj  colors. 
[Quotations  from  price  section,  War  Industries  Board.] 


Commodity. 


Market. 


I'eriod. 


Prussian  blue. 


New  Yorii 


Price 

per 

pound. 


July  1, 1913,  to  June  30,  1914. .  $0.2933 

1913 3000 

1914 3175 

1915 8292 

1916 1.6917 

1917 I.:a75 


191S 1.1300 


1917 


First  Quarter 

Second  quarter 

Third  quarter 

Fourth  quarter 


1918: 

First  quarter 

Second  quarter. . 
Third  quarter... 
Fourth  quarter. 

1919:a 

Fir.st  quarter 

April 


1.5000 

1.5000 

1.  ,-,000 

.8500 


.9100 
.9900 
1.3500 
1. 2700 


.9300 
.8000 


Rela- 
tive 
price. 


100 
100 
101 
274 
566 
447 
378 


502 
502 
502 
2S4 


304 
331 
451 
424 


315 
272 


Lampblack. 


New  York. 


Price 

per 

pound. 


.0300 
.0300 
.0300 
.0363 
.1163 
.1317 
.1375 


.1200 
.1400 
.1400 
.1207 


.1200 
.1:500 
.1.500 
.1500 


.  1.500 
.1500 


Rela- 
tive 
price. 


100 
100 
100 
121 
388 
439 
458 


400 
467 

4G7 
422 


400 
433 
500 
500 


500 
500 


Ultramarine. 


New  York. 


Price 

per 
pound. 


SO.  0383 
.0400 
.0358 
.0388 
.1075 
.  21.33 
.1550 


.2000 
.  23.5;5 
.2.51X1 
.1700 


,1700 
.1700 
,1400 
.1400 


.1266 

.0800 


Rela- 
tive 
price. 


100 
105 
94 
101 
281 


522 
609 
6-53 
444 


414 
441 

3tW 
366 


330 
209 


Umber.        Venetian  red. 


New  York,    i    New  York. 


Price  I  Rela-'   Price 

per     1  tive  |     per 

pound,  j  price,  pound. 


$0.0200 
.0200 
.0200 
.0200 
.0202 
.0-296 
.0350 


.0225 
.0275 
.0317 
.0367 


.0350 
.03.50 
.  03.50 
.0350 


.a3.->o 

.0350 


100  '$0.0075 
100  ''     .0075 


100 
100 
101 
148 
175 


112 
138 
153 
184 


175 
175 
175 
175 


175 
175 


.0075 
.0075 
.0190 
.0244 
.0250 


.0300 
.0275 
.0275 
.0225 


.0250 
.02,50 
.0250 
.0250 


.0250 
.0^50 


Rela- 
tive 
pricd. 


100 

too 

100 
100 
253 
325 
333 


267 
367 
367 
300 


33.1 
333 
333 
333 


33-i 
333 


o  Figures  for  1919  from  Oil,  Paint,  and  Drug  Repwter. 


ECONOMICS   OF   THE    CONSTRUCTION   INDUSTRY. 


167 


Table  72. — Wholesale  j)rices  on  paints  and  ■pvnnenls. 
[Quotations  from  price  section,  AVar  Industries  Board.] 


Outside 
white  paint. 

Basic  lead 
sulphate. 

Red  load. 

Litharge. 

Lithor 

one. 

New  York. 

New  York, 

New  York. 

New  York. 

New  "i 

'ork. 

Ferio'l . 

Price 

per 

gallon. 

Rela- 
tive 
price. 

Price 

per 
pound. 

Rela- 
tive 
price. 

Price 

per 

pound. 

Rela- 
tive 
price. 

Price 

per 

pound. 

Rela- 
tive 
price. 

Price 

per 

pound. 

Rela- 
tive 
price. 

Julv  1,1913, to  June  30,1914.... 
1913 

$1.4200 
1.4200 
1.4200 

1.  4200 
1.8967 

2.  5.500 
3. 3000 

2. 2.500 
2.  4.500 
2. 7500 
2. 7500 

2.  7500 

3.  2500 
3. 6(KK) 
3.  6(X10 

100 
100 
100 
100 
134 
180 
232 

1.58 
173 
194 
194 

194 
229 
2.54 
254 

«0. 0510 
.0523 
.0496 
.  0540 
.0817 
.0940 
.0894 

.08.33 
.0942 
.1100 
.0883 

.0875 
.  0858 
.0917 
.0925 

.  08.57 
.0825 

100 
103 
97 
106 
160 
184 
175 

163 
185 
216 
173 

172 
168 
180 
181 

108 
162 

$0.0629 
,06-54 
.  05S.8 
.0635 
.0925 
.1117 
.1060 

.1000 
.1133 
.1300 

.io;33 

.1000 
.1008 
.  1108 
.1125 

.10.58 
.1025 

100 
104 
93 
101 
147 
178 
169 

159 

180 
207 
164 

159 
160 
176 
179 

168 
163 

SO.  0.594 
.0644 
.  0540 
.  0581 
.0875 
.  1063 
.1010 

.09:53 
.  1083 
.  1250 
.0983 

.0950 
.09.58 
.  1058 
.1075 

.  1008 
.0975 

100 
108 
91 
98 
147 
179 
170 

1-57 
182 
210 
165 

160 
161 
178 
181 

170 
164 

S0.a375 
.0.375 
.0375 
.0508 
.1094 
.0623 
.0733 

.0608 
.0625 
.0642 
.0617 

.0650 
.0717 
.0767 
.0800 

.  0736 
.0650 

100 

100 

1914  

lOO 

1915                          

13.5 

1916 

292 

1917 

16f> 

1918 

195 

1917: 

First  quarter 

Third  quarter 

Fourth  quarter 

1918: 

First  quarter 

162 
167 
171 
167 

173 
191 

Third  quarter 

Fourth  quarter 

1919: 

First  quarter 

205 
213 

19« 

173 

Table  73. —  Wholesale  marlet  prices  on  paint  materials. 
[Quotations  from  price  section,  War  Industries  Board.] 


Basic  lead 

carbonate, 
dry. 

White  lead 
in  oil. 

Zinc  oxide, 
French 

Zinc  oxide, 
standard. 

Barji 
domes 

floate 

es. 
tic 

process. 

d. 

New  York. 

New  Yrok. 

New  York. 

New  York. 

New  Y 

Drk. 

Period . 

Price 

per 

pound. 

Rela- 
tive 
price. 

Price 

per 

pound. 

Rela- 
tive 
price. 

Price 

per 

pound. 

Rela- 
tive 
price. 

Price 

per 

pound. 

Rela- 
tive 
price. 

Price 
per 
ton. 

Rela- 
tive 
price. 

■Tulv  1,1913,  (0  June  30,1914.. 
1913 

m.  0533 
.  0533 
.  0.521 
.  0.569 
.  0829 
.0992 
.0956 

.0892 
.  0992 
.  11.50 
.0933 

.0933 

.OiJO.8 
.  09.s;j 
.1000 

.  0907 
.0900 

100 
100 
98 
107 
150 
186 
179 

167 
186 
216 
175 

175 
170 

185 

187 

181 
169 

•SO.  0681 
.  0675 
.0675 
.0698 
.  0927 
.  1121 
.1268 

.0992 
.1108 
.  1275 
.1108 

.  1075 
.1210 
.  1386 

.1400 

.1367 
.1300 

100 
99 
99 
102 
136 
165 
186 

116 
103 
187 
163 

158 
178 
204 
206 

200 
191 

$0. 0667 
.0692 
.0658 
.  1612 
.1746 
.  1.5.50 
.  12*2 

.1750 
.  1,58:5 
.1500 
.1387 

.1267 
.  1:500 
.1:500 
.1300 

.  12.*5 
.11.30 

100 
104 
99 
242 
262 
232 
194 

262 
238 
225 
205 

190 
195 
195 
195 

192 

172 

SO.  0538 
.  0.538 
.0.538 
.0667 
.tVJ19 
.1004 
.0997 

.0975 
.0992 
.1023 
.1025 

.1000 
.1000 
.1000 
.0990 

.0950 
.0950 

100 
100 
100 
124 
171 
187 
185 

181 
184 
191 
191 

186 
186 
186 

18-4 

177 
177 

S17.0000 

16.  .8333 

17.  OOOO 
16.  4792 
25.  1667 

27.  7500 
31. 0833 

25.  OOOO 
28. 0(M)0 

28.  OOOO 
30.(X)00 

28.0000 
30.  6t')67 
32.  ti667 
33.0000 

33.0000 
30.  5(KH) 

100 

m 

1914 

100 

1915 

luie 

97 
14? 

1917 

163 

1918 

183 

1917: 

147 

Second  quarter 

Third  quarter 

16.5 
165 
177 

1918: 

Fii'st  quarter 

1S.5 

Second  quarter 

Third  quarter 

190 

192 
194 

1919: a 

First  quarter 

194 
179 

a.  Prices,  1919,  from  Oil,  Paint,  and  Drug  Reporter. 


HCONOMTaS   OF   THE   COXSTRUCTION    INDUSTRY. 

Taim.k  74.  —  Wholrsfilr.  iixarhcl  priren  an  paint  iwileriah. 
|(Jiintiill()iis  from  jirico  scflion,  Wur  Iiidu.strics  Board.] 


Coininwllt  V 

Turpe? 

tine. 

Turpentine. 

Whiting. 

Putty. 

Blanc  f 
pulp 

ixe, 

Market 

New  Yorlc. 

Savannah. 

New  Yorl?. 

New  York. 

New  Y 

ork. 

IVriod. 

Price 

per 

gallon. 

Rela- 
tive 
price. 

Price 

l)er 

gallon. 

Rela- 
tive 
price. 

Price 
pnr 
cwt. 

Rela- 
tive 
price. 

Price 

per 

pound. 

Rela- 
tive 
price. 

Price 
per 
ton. 

Rela- 
tive 
price. 

July  1, 1913,  to  June  30, 1914 . . 
1913 

$0.4500 
.4279 
.4733 
.  4594 
.4910 
.  4S77 
.  5!,31 

..53)2 
.  4S50 

.  42;« 

.  .5080 

.  4692 
.5156 
.  6640 
.7237 

.7133 
.  7500 

100 
95 
105 
102 
109 
108 
132 

119 
108 
94 
113 

104 
115 
148 
161 

1.59 
167 

$0. 4165 
.3931 
.4477 
.4281 
.  4544 
.  4475 
.5138 

.  5033 
.4325 
.3808 
.4733 

.  42 12 
.4108 
..5017 
.6283 

.  6700 

100 
94 
107 
103 
109 
107 
123 

121 
104 
91 
114 

102 
99 
142 
151 

163 

$0.4500 

.4.500 
.4500 
.4708 
.7000 
1.0667 
1 . 2375 

.  9500 

.9.500 

1.0.500 

1.3167 

1.2000 
1.2500 
1.2500 
1.2500 

1.2500 
1.2500 

100 
100 

100 
105 
155 

275 

211 
211 
2:53 

292 

267 
278 
278 
278 

27S 
278 

$0.0115 
.0115 
.0115 
.0115 
.0325 
.04(J0 
.0466 

.0330 
.0370 
.  0150 
.04.50 

.04.50 
.04.50 
.0495 
.0470 

.0470 
.0465 

100 
100 
100 
100 
283 
348 
405 

287 
322 
391 
391 

391 
391 
430 
409 

409 
404 

$40.0000 
40.0000 
40.0000 
42.  .5000 
97.08;» 
35. 4167 
35.0000 

36. 6667 
35.0000 
35.0000 
35.  (WOO 

35.0000 
35.0000 
35.0000 
3.5.0000 

35.0000 
35.0000 

100 
100 

1914 

100 

1915 

1916 

1917 

106 

243 

89 

1918 

88 

1917: 

First  quarter 

92 
S8 

Third  quarter 

88 

Fourth  quarter 

1918: 

First  quarter 

Second  qu;u-ter 

88 

88 
88 
88 

Fourth  quarter 

88 

1919:1 

First  quarter 

April     

88 
88 

1  Figures  for  1919  from  Oil,  Paint,  and  Drug  Reporter. 

T.\BLE  75. — Wholesale  prices  on  cdt-nish  raw  materinU. 
[Quotations  from  price  section,  War  Industries  Board.] 


Commodity ^^^IX"' 


Market New  York 


Price 

per 

poimd. 


Rela- 
tive 
price 


Kauri  gum, 

ordinary 

cliips. 


New  York. 


Price 

per 

pound. 


Rela- 
tive 
price, 


Shellac,  T.  X. 


New  York. 


Price 

per 

poimd. 


Rela- 
tive 
price. 


Camauba 
wax. 


New  York. 


Price 

per 

pound. 


Rela- 


Casein. 


New  York. 


Price     Rela- 

per       live 

pound,  price. 


Julv  1, 1913,  to  Jime  30,  1914 

1913 

1914 

1915 

1916 

1917 

191S , 

1917: 

First  ciuarter 

Second  quarter 

Third  quarter 

Fourth  quarter 

1918: 

First  quarter 

Second  quarter 

Tliird  quarter 

Fourth  quarter 

1919: » 

First  quarter 

April 


$0. 0725 
.0700 
.0842 
.0917 
.0915 
.0973 
.1383 


.0792 
.  0900 
.1000 
.1200 


.1200 
.1233 
.1500 
.1600 


.1466 
.1400 


100 
97 
116 
126 
126 
134 
191 


109 
124 
138 
166 


166 
170 
207 
221 


202 
193 


$0. 1303 
.1300 
.1571 
.  1,575 
.1321 
.1317 
.2008 


.1300 
.1300 
.1300 
.1367 


.1800 
.  1800 
.2133 
.2300 


.2300 
.2300 


100 
95 
115 
116 
97 


95 
95 
95 
100 


132 
132 
1.56 
169 


169 
169 


SO. 1913 
.2008 
.1592 
.1488 
.  27.17 
.5258 
.6317 


.4400 
.  5767 
..5733 
.5133 


.5867 
.6267 
.6600 
.6533 


.5.S00 
.4600 


100 
105 
83 
78 
143 
275 
330 


230 
301 
299 
268 


306 
328 
345 
341 


277 
240 


-SO.  4463 
.  4567 
.  4542 
.3550 
.3717 
.4642 
.7875 


.4133 
.4500 
.  4700 
.5233 


.6000 
.8467 
.8667 
.8367 


.7466 
.7200 


100 
102 
101 
79 
83 
104 
176 


92 
101 
105 
117 


134 
190 
194 
1S7 


167 
161 


SO.  07.50 
.0750 
.0178 
.0891 
.1925 
.1983 
.1754 


.1667 
.1900 
.2200 
.2167 


.1800 
.1567 
.16,50 
.2000 


.1933 
.1800 


100 
100 
64 
119 
257 
264 
234 


222 
253 
293 
289 


240 
209 
220 
267 


257 
240 


•  Figures  for  1919  from  Oil,  Paint,  and  Drug  Reporter. 


ECONOMICS    OF   THE    CONSTRUCTION    INDUSTRY. 


169 


Table  76.— Wholesale  marJeet  prices  on  paird  and  varnish  vmterials. 
[Quotation  from  price  section,  War  Industries  Board.] 


Commoditv. 


Period. 


July  1,  1913,  to  June  30,  191-} . 

1913 

1914 

1915 

1916 

1917 

1918 


1917: 

First  quarter 

Second  quarter . 
Third  quarter... 
Fourth  quarter . 


1918: 


First  quarter 

Second  quarter . 
Third  quarter. . . 
Fourth  quarter. 


1910:' 

First  quarter. 
April 


Inside  oil 
varnish. 


New  York. 


Price 

per 

gallon. 


SI.  6250 
1.  6250 
1.  6250 
1.  0250 
1.  6250 

1.  7500 

2.  -1417 


1.  7500 
1.  7500 
1.  7500 
1.  7500 


2.0000 
2.  5000 
2.  5667 
2.7000 


Rela- 
tive 
price. 


100 
100 
100 
100 
100 
108 
150 


108 
108 
108 
108 


123 
154 
158 
166 


Linseed  oil. 


New  York. 


Price 

per 

eallon. 


$0.  4863 
.4621 
.5017 
.5617 
.  7.508 
1. 1067 
1.  5920 


.  9333 
1.  1533 
1.  1767 
1. 1633 


1.  3731 
1.  5650 
1.  8371 
1.  5928 


1.  4833 
1.  5000 


Rela- 
tive 
price. 


100 
95 
103 
116 
154 
228 
327 


192 
237 
242 
239 


282 
322 
378 
328 


305 
308 


Sova  bean  oil. 


F.  o.  b.  mill. 


Price     Rcla- 

per     I  five 

pound.  I  price, 


.0637 
.0612 
.  0630 
.0625 
.  0891 
.1421 
.1828 


1233 
,  1433 
,  1379 
,1638 


,1821 

,  1908 
,1808 
.1775 


.  1400 
.1450 


100 
96 
99 
98 
140 
223 
287 


194 
225 
217 
257 


286 
299 
284 
279 


220 

228 


China  wood 
oil. 


New  York. 


Price 

per 

pound. 


ID.  0693 
.0728 
.0701 
.0674 
.  1154 
.1677 
.  25-42 


.1292 
.  1483 
.  1767 
.2167 


.2000 
.2500 
.  2867 
.  2.S00 


.  2333 
.1850 


Rela- 
tive 
price. 


100 
105 
101 
97 
167 
242 
367 


186 
214 
255 
313 


289 
361 
414 

404 


337 
271 


Paints 
and  var- 
nishes. 


Com- 
posite 
index.' 


100 
100 
100 
109 
144 
173 
214 


159 
173 

183 
178 


186 
212 
230 
230 


215 
202 


'  Index  figure  computed  by  price  section,  War  Industries  Board. 
s  Prices  for  1919  from  Oil,  Paint,  and  Drug  Reporter. 

SECTION  XV.  MISCELLANEOUS  BUILDING  MATERIALS. 
Introduction. 

The  principal  basic  building  materials  have  been  covered  in  the 
preceding  sections  of  this  study.  There  is  at  hand,  however,  a  cer- 
tain amount  of  material  on  commodities  which  are  not  really  classi- 
fiable in  any  of  the  preceding  groups.  These  commodities  are  here 
considered  under  the  heading  of  miscellaneous  building  materials. 

Roofing  materials. 

Three  price  series  on  roofing  papers  are  shown  in  Table  77. 
Except  in  the  case  of  rubber  roofing  paper,  prices  for  1919  have 
not  been  found  that  are  quoted  on  the  same  basis  as  the  prices  here 
shown.  The  table  show^s  reductions  in  prices  of  rubber  roofing  paper 
since  the  beginning  of  the  year  1919.  This  kind  of  a  material  rose 
less  rapidly  than  the  others  on  account  of  the  conspicuously  small 
rise  in  prices  of  rubber  as  compared  with  other  commodities.  Another 
series  of  quotations  not  given  here  shows  tarred  felt  paper  in  April, 
1919,  to  have  decUned  about  19  per  cent  since  the  beginning  of  the 
year. 

Three  manufacturers  of  prepared  roofing  materials  have  furnished 
some  data  on  production  costs.  Averages  of  their  figures  indicate 
that  in  1918  the  labor  cost  was  8.7  per  cent  of  the  total  production 


170  E(?ON(lMI(;S    OF    THE    CONSTRUCTION    INDUSTRY. 

cost;  niw  materials  accounted  for  77.0  per  cent:  fuel,  2.7  per  cent; 
(rnnsportntiou,  3.8  per  cent;  other  elements,  7.2  per  cent.  It  is 
thus  seen  that  prices  of  these  products  are  affected  more  by  the 
prices  of  raw  materials  than  by  all  other  factojs  combined,  and  that 
advances  and  declines  in  prices  are  mainly  dependent  upon  corre- 
sponding advances  and  declines  in  the  raw  materials. 

According  to  figures  furnished  by  the  manufacturers  mentioned 
above,  the  labor  cost  in  1918  was  80  per  cent  greater  than  in  1913; 
the  cost  of  raw  materials  was  88  per  cent  greater:  fuel,  170  per  cent; 
transportation,  78  per  cent;  other  elements,  77  per  cent.  The 
total  production  cost  increased  dming  this  period  87  per  cent,  accord- 
ing to  these  figures. 

In  1918,  the  Government  ordered  curtaUment  of  production  of 
composition  roofing  by  60  per  cent  of  normal  capacity. 

Sanitary  porcelain. 

Two  series  of  prices  on  sanitary  porcelain  are  given  in  Table  77. 
In  both  series  the  index  for  the  last  quarter  of  1918  is  less  than 
for  the  previous  quarter.  This  is  due  to  considerable  reductions 
in  the  month  of  Pecember.  The  porcelain  sinks  were  quoted  m 
November  at  $27.56,  and  in  December  at  $21.20;  this  reduction 
amounted  to  23  per  cent.  Urinals  were  quoted  in  November  at 
S33.07,  and  in  December  at  $25.44,  this  reduction  amounting  also 
to  23  per  cent. 

Production  conditions  affecting  sanitary  porcelain  were  pretty 
much  as  described  in  Section  IX  (Clay  products).  In  1918  the 
Fuel  Admmistration  ordered  curtailment  of  production  of  pottery 
to  50  per  cent  of  normal. 

An  important  producer  of  sanitary  pottery  has  furnished  data 
on  production  costs.  According  to  his  figures,  in  1918  labor  accounted 
for  63  per  cent  of  the  total  production  cost;  raw  materials,  10  per 
cent;  fuel,  6  per  cent;  other  elements,  21  percent.  In  1918  labor 
costs  were  40  per  cent  greater  than  in  1913;  raw  materials  increased 
60  per  cent;  fuel  cost,  60  per  cent:  transportation,  35  per  cent:  other 
elements,  60  per  cent.  The  total  production  cost  was  51  per  cent 
greater  in  1918  than  in  1913. 

Plumbing  and  heating  materials. 

Table  78  gives  prices  on  nonferrous  metal  products  which  are  used 
as  })lumbing  and  electrical  supplies.  Figures  on  6-hich  cast-iron  pipe 
are  given  in  Section  VIII.  No  attempt  has  been  made  to  secure 
price  series  on  the  more  higldy  manufactured  products  in  the  plimib- 
iug  and  heating  group. 

Production  figures  on  lead  and  zinc  are  given  in  connection  with 
Section  XIV  (Paint  materials^ 

Many  manufacturei"s  of  plimibing  and  heatuig  specialties  turned 
their  attention  to  production  of  ordnance  material  and  other  war 


ECON"OMICS   OF   THE   CONSTEUCTIOX   INDUSTRY.  171 

munitions.  This  involved  a  decrease  in  production  of  plumbing, 
heating,  and  ventilating  materials.  Decrease  in  production  of. 
cast-iron  boilers  and  radiators  to  the  extent  of  50  per  cent  of  normal 
capacity  was  ordered  by  the  Fuel  Administration  in  19 IS.  The 
decreased  production,  together  with  increases  in  production  costs, 
led  to  higher  prices.  Substantial  reductions  in  these  lines  were 
announced  early  in   1919. 

Several  important  producers  of  plumbing  materials  furnished  to 
the  Division  of  Public  Works  and  Construction  Development  data 
on  production  costs.  Accordmg  to  averages  obtained  from  these 
figures,  in  1918  the  labor  cost  was  37.2  per  cent  of  the  total  production 
cost;  raw  materials,  43.5  per  cent;  fuel,  4.4  per  cent;  other  elements^ 
14.9  per  cent. 

According  to  the  same  authorities  the  uicrease  in  labor  cost  from 

1913  to  1918  was  78.5  per  cent;  in  cost  of  raw  materials,  76  per  cent ; 
in  fuel  cost,  70  per  cent;  in  other  elements  of  production  cost,  6*J 
per  cent.    The  uicrease  in  total  production  cost  was  76  per  cent. 

An  important  firm  which  manufactures  radiators  has  reported 
that  in  1918  its  production  cost  was  divided  as  follows: 

Per  cent. 

Labor 41.  7 

Raw  materials 4*i.  7 

Fuel T .  :' 

Transportation 1  • '  i 

<"h^her  elements 2.  7 

The  same  firm  stated  that  its  increases  in  elements  of  cost  from 

1914  to  1918  were  as  follows: 

Per  cent. 

Labor "5 

Raw  materials 74 

Fuel 175 

Transportation 48 

Other  elements 5<' 


Total  production  cost  increased 81 

Naval  stores  and  asphalt. 

Price  series  on  rosin,  pine  tar,  and  asphalt  are  given  in  Table  79. 
In  comiection  -VN-ith  naval  stores,  prices  and  production  figures  on 
turpentme,  included  m  section  XTV  (paint  materials),  should  bo 
considered. 

Production  figures  on  rosm  are  as  follows:'* 


Year  ended  April  1  — 


1913. 
1W4. 
1915. 
1916. 


500-poimd    !'  rear  ended  April  1-  1   ^C>b!* 


barrels 


2.266,000  i*  1917 l.TW.OM 

2.131.000'  1918 1 .  VJO.  Gun 

1.705.000"  1919!> ,  91.'-., 9« 

1,565,000;,  i 


a  Estimated. 

6  Figures  from  XavalStores  Reviewand  Journalof  Trade,  Apr.  6, 1'.>J'.>. 


172  KCONO.MICS    OF    THH    < 'OXSTl!  I'l 'TION     IXDlSTllY. 

Ill  I  ho  cas(^  of  this  commodity  iho  very  considoraLlo  docreaso  in 
production,  coupled  with  an  increased  demand  occasioned  by  the 
shipbuilding  program,  caused  a  very  considerable  rise  in  prices. 

The  April,  lOlS-March,  1910,  production  figure  is  40  per  cent 
under  the  figure  for  the  previous  year,  while  prices  during  the  first 
quarter  of  1919  had  advanced  224  per  cent  over  the  pre-war  figure. 

The  figures  on  asphalt  are  not  complete.  The  fact  that  figures  on 
the  New  York  market  for  the  greater  part  of  1918  are  lacking  is 
explained  by  the  fact  that  there  was  practically  no  asphalt  in  stock 
in  this  market  during  the  greater  part  of  the  year. 

Metal  lath. 

Quotations  on  expanded  metal  lath  are  given  in  Table  80.  wSince 
these  figures  do  not  extend  over  the  six-year  period  that  has  been 
considered  in  connection  with  most  of  the  other  commodities  that 
have  been  studied,  indices  have  not  been  computed.  Instead,  the 
advances  for  April,  1919,  over  the  first  quarter  of  1917  are  given. 
The  average  of  the  advances  for  this  period  in  the  six  markets  is 
65  per  cent.  The  figures  that  are  given  for  some  of  the  markets  for 
periods  earher  than  1917  show  that  the  advance  over  the  year  pre- 
ceding July  1,  1914  would  probably  be  considerably  larger  than  this. 

Early  in  1919  the  chairman  of  the  War  Service  Committee  on  Metal 
Lath  stated  that  productive  capacity  in  the  mdustry  was  being 
employed  at  only  25  per  cent  of  capacity,  owmg  to  the  slight  demand 
for  the  product  at  that  time.  He  attributed  high  prices  to  the 
increases  in  wages,  and  to  increased  cost  of  material,  fuel,  and 
transportation. 

Builders'  hardware  and  lighting  fixtures. 

No  attempt  has  been  made  to  secure  price  data  on  builders'  hard- 
ware and  lighting  fixtures  since  these  products  scarcely  come  within 
the  classification  of  basic  materials.  As  in  the  case  of  producers  of 
heating  and  plumbing  materials,  this  group  of  manufacturers  was 
able  to  utilize  its  plants  for  the  production  of  war  materials.  In  1918 
the  Government  ordered  curtailment  of  production  of  builders' 
hardware  by  60  per  cent  of  the  total  capacity. 

Average  figures  based  on  statements  made  by  representative 
manufacturers  of  builders'  hardware  mdicate  that  the  1918  cost  of 
production  was  83  per  cent  higher  than  the  1913  cost.  According  to 
these  figures  the  labor  cost  increased  110  per  cent;  raw  materials, 
80  per  cent;  fuel  cost,  100  per  cent;  other  elements  of  cost,  50  per 
cent.  The  1918  production  cost  was  divided  as  follows:  Labor, 
41  per  cent  of  total;  raw  materials,  24  per  cent;  fuel,  3  per  cent; 
other  elements,  32  per  cent. 

Producers  of  lighting  fixtures,  particularh^  those  who  make  goods 
of  high  quality,  were  scriousl}'  affected  by  the  war,  except  such  of 


ECOXOMICS    OF    THE    CONSTRUCTIOX    INDUSTRY.  173 

them  as  secured  contracts  for  munitions.  It  was  stated  early  in 
1919  that  factories  producing  this  hne  of  goods  were  operating  at 
only  40  per  cent  of  capacity. 

Gypsum  products. 

No  price  series  has  been  included  on  this  group  of  materials. 
However,  the  use  of  gypsum  partition  blocks  and  other  gypsum 
materials  has  increased  considerably  within  the  past  few  years,  and 
this  is  growing  to  bo  a  material  of  considerable  importance. 

Four-mch  partition  tile  was  quoted  in  Chicago  (dealer's  price, 
delivered  on  the  job)  at  7^  cents  per  foot  in  January,  1917,  and  at 
11  cents  per  foot  in  December,  1918;  a  rise  of  47  per  cent.  Three- 
eighths  mch  plaster  board  was  quoted  in  New  York  (dealer's  price, 
delivered  on  the  job)  in  November,  1917,  at  20  cents  per  32  by  36 
inch  sheet,  and  in  December,  1918,  at  30  cents  per  sheet;  an  increase 
of  50  per  cent. 

Early  in  1919  this  industry  was  operating  at  50  per  cent  of  the 
average  capacity  of  the  years  1915,  1916,  and  1917,  and  production 
costs  were  said  at  that  time  to  have  mcreased  100  per  cent  over  1913. 
This  increase  was  due  to  an  increased  labor  cost  of  109  per  cent; 
an  increased  fuel  cost  of  75  per  cent,  and  an  increase  in  other  elements 
of  production  cost  of  97  per  cent.  In  1918,  the  labor  cost  was  said  to 
represent  47  per  cent  of  the  total  cost  of  production  of  gypsum 
products. 

Millwork. 

Lumber  prices  have  been  treated  fairly  comprehensively  in 
Section  VII. 

Certam  figures  on  costs  of  production  of  millwork  are  of  uitcrest 
and  are  given  here.  These  figures  were  ob  tamed  from  the  millv/ork 
industry  through  the  courtesy  of  the  chairman  of  its  War  Service 
Committee.  Averages  of  the  figures  presented  show  the  1918  produc- 
tion cost  to  have  been  distributed  as  follows:  Labor,  30  per  cent; 
raw  materials,  58  per  cent;  transportation,  4  per  cent;  other  ele- 
ments, 8  per  cent.  Most  woodworking  factories  burn  their  own 
waste  for  power,  and  hence  have  no  coal  consumption. 

According  to  the  statements  furnished,  from  1913  to  1918,  the  labor 
cost  mcreased  66  per  cent;  raw  materials,  103  per  cent;  transporta- 
tior,  50  per  cent;  other  elements,  77  per  cent.  The  total  production 
coet  increased  88  per  cent. 


174  ECONOMICS   OK   THE   CpNSTRUCTION   INDUSTRY. 

'I'abi,e  77. —  Whohmle  innrht'l  prices  on  rnofiiKi  'mdlfrhih  anf)  iianitar)j  jMrcelam. 
(Qtioliitions  from  prici'  scclinn,  War  Industries  J'.oard.] 


CoiuniiKlitv . 


Maikcl. 


Unit. 


Period. 


July  1, 1913,  to  June  30, 1914. 

1913 

1914 

191 J 

1910 

1917 

1918 


1917: 


191S 


First  quarter 

Second  quarter.. 
Third  quarter. . . 
P'oui'th  quarter. 

First  quarter 

Second  quarter.. 
Third  quarter. . . 
Fourth  quarter. 


First  quarter. 
April 


Kooflng  materials. 


Porcelain  sanitarv  ware. 


lUiilding 

paix'r,  rosin- 

si/ed, 

shcatlaing. 


New  Yorlc. 


25-pound  roll. 


Price 
per  roll. 


$0.4000 
.4(XI0 
.  -1000 
.4000 
.6092 
.9525 


.9933 

.9500 

1.0167 

.8500 


.8333 
.  8000 
.8000 
.8000 


Rela- 
tive 
price. 


Tarred  felt 
paper,  3-ply. 


New  York. 


Roll. 


Price 

per  roll. 


100 
lOO 
100 
100 
152 
238 
202 


248 
238 
254 
212 


209 
200 
200 
200 


SO.  6800 

.6800 

.6800 

.6888 

1.0171 

1.1450 

1.  2133 


1. 1317 
1. 1650 
1. 1533 
1. 1300 


1. 1633 
1.2300 
1.2300 
1.2300 


Rela- 
tive 
price. 


100 
100 
100 
101 
150 
168 
179 


166 
171 
170 
166 


171 
181 
181 
181 


Rubber 


roofing  pai>er,  .^.  ,     „!  inches 
arst  quality,   •'°  ■>  .'^V^'^^s, 
1-1'ly. 


New  York. 


108-square- 
foot  rolls,  32 
inches  wide, 

35  pounds. 


Price 
per  roll. 


SI.  1500 
1.1500 
1.1500 
1. 1375 
1.3500 
1. 5708 
1.4500 


1.5833 
1.6500 
1.6000 
1.4500 


1.4500 
1.4500 
1.4500 
1.4500 


1.3500 
1.3500 


Kitchen  sinks, 
by  2-tincli 
high  back, 


East  of 

Mississippi 

River. 


Apiece. 


price.    P"^'^' 


Rela 
tive 
price, 


100  $13.9800 
100  ;  13.9800 
13. 9800 
13. 9800 
13.4133 
15.9558 
24.  2725 


100 
99 
117 
137 
126 


138 
143 
139 
126 


126 
126 
126 
126 


117 
117 


13.4667 
14.  •>867 
17.5600 
18.1100 


18. 6.500 
25.4400 
27.  .5600 
25,  4400 


100 
100 
100 
100 
96 
114 
174 


96 
105 
126 
130 


134 
182 
197 
182 


UrinaLs,  white, 
gla7,ed  finish. 


East  of 

Mississippi 

River. 


Apiece. 


Quoted 
price. 


$16. 1700 
16.1700 

16. 1700 
16. 1700 
16. 1700 
17.3350 
27.2042 


16. 1700 
16. 4333 
18.0867 

18.6500 


18.6500 
26.5700 
33.0700 
30.5267 


Rela- 
tive 
prii*. 


100 
109 

100 
100 

lOO 
107 
li.9 


100 
102 
112 
115 


115 

158 
205 
1S9 


ECONOMICS   OF   THE   CONSTRUCTION   INDUSTRY. 


175 


T.\BLE  78. — Wholesale  mariet  jn-ices  on  nonferrom^  metol  prod^icta. 
(Series  1, 2,  and  3  from  price  secti«Mi,  War  Industries  Board.   Series  4  and  5  from  Bureau  o  ( Labor  Sta  tistics4 


Commodity 

1.  Lead 

pipe. 

2.  Sheet  lead. 

3.  Solder,  hall 
and  half, 
case  lots. 

4.  Zinc, 

sheet. 

5.  Copper  wire, 

bare  No.  8, 

B.  &  S.  gauge, 

and  heavier. 

Market 

New  York. 

New  York. 

New  York. 

F.  0.  b.   La 
Salle  and 
Peru,  111. 

AVaterl 
Con 

3ury, 

u. 

Period. 

Price 
l>er 
c^^i;. 

Rela- 
tive 
price. 

Price 
per 
cwt. 

Rela- 
tive 
price. 

Price 

per 

pound. 

Rela- 
tive 
price. 

Price 
per 
cwt. 

Rela- 
tive 
price. 

Price 

per 

pound. 

Rela- 
tive 
price. 

July  1 ,  1913,  to  June  30, 1914. 
1913 

84.8725 
5.0708 
4. 5175 
5. 3650 
7. 6708 

10. 1217 
8.8892 

9.3067 
11.3267 
11.84^7 

8.0067 

8.2500 
8. 6867 
9. 3100 
9. 3100 

7.51.33 
6l5170 

100 
104 
93 
110 
157 
208 
182 

191 
233 
243 
164 

169 
178 
191 
191 

154 
134 

$5.5750 
5. 6767 
5. 1983 
6.1192 
8.3550 

10.6392 
9.3792 

9.9067 

11.8167 
12.:B67 
8. 4967 

8.7400 
9. 1767 
9.8000 
9.800O 

100 
102 
93 
110 
150 
191 
168 

178 
212 
221 
152 

157 
165 
176 
176 

$0.2602 
.2917 
.2286 
.2535 
.2815 
.3738 
.  5S17 

.3379 
.3671 
.39.3:3 
.3967 

.5100 
.6200 
.6267 
.5700 

100 
112 

88 
97 
108 
143 
224 

130 
141 
1.51 
152 

196- 
238 
241 
219 

S6.7658 
7. 2450 
6. 9192 
16. 1575 
IS.  783=3 
18.  0933 
14.  2381 

19.3200 
18.0933 
17.4KM 
17.4800 

13.  .5524 
13.8000 
13.8000 
13.8000 

10.  M32 
9.2000 

100 
105 
102 
239 

278 
267 
210 

286 
267 

258 
258 

230 

204 

.   204 

204 

157 
136 

$0. 1616 
.1673 
.1465 
.1850 
.3052 
.3300 
.2762 

.3675 
.3475 
.3175 

.2875 

.2625 
.26.39 
.2883 
.2900 

.301* 
.1748 

100 
104 

1914 

91 

1915 

114 

1916 

189 

1917 

204 

1918 

171 

1917: 

First  quarter  . 

227 

215 

Third  quarter 

197 

17i 

1918: 

First  quarter 

163 

Second  quarter 

16;J 

Third  quarter 

179 

Fourth  quarter 

1S<J 

1919: 

Fir.-;t  quarter 

125 

April 

, 

lOti 

.     .   .   .j..       . 

1 

176 


ECONOMICS   OF   THE   CONSTRUCTION   INDUSTRY. 


Tabi.k  79.— Wholesale  viarkct  prices  on  nnvnl  stores  and  asphalt. 
ISeries  1  and  2from  price  section.  War  Industries  Board.    Series  3  to  7  from  the  Engineering  News- Record.) 


ronimodil  V 


Miirkel 


Julv  1,  1913,  to  June 

30,  1914 

1913 

1914 

1915 

1910 

1917 

1918 

1917: 

First  quarter . . . 
Second  ([uarter . 
Third  quarter. . 
Fourth  (juarter . 

191S: 

First  quarter . . . 
Second  quarter. 
Third  quarter... 
Foui'tli  quarter . 

1919: 

First  quarter . . . 
April 


Naval  stores. 


1.  Rosin, 
grade  F. 


Savannah. 


Price  per 
barrel.! 


$3. 9150 

4.  6500 
3.  8063 
3.  5621 

5.  50S3 
5.  795S 
9.  2917 

6.1167 

5.  7000 
5.2333 
6.1333 

6.  0167 
6.2500 

10. 9333 
13. 9667 

5 12. 7667 
5 10. 9500 


■Rela- 
tive 
price. 


100 
119 
97 
91 
141 
148 
237 

156 
146 
1.34 
157 

154 
160 
280 
357 

324 
280 


2.  Tar,  pine. 


3.  Texaco 
brand  in 
packages. 


Wilmington, 
N.  C. 


Price     Rela- 
perl)ar-  tivc 
rcl.2      price. 


Asphalt. 


4.  Texaco 
brand  in 


New 
York. 


5.  Mexi- 
can 

packages,  packages. 


Chicago. 


Price  per 
ton. 


$2.  2292 

100 

2.  2250 

100 

2.  1875 

98 

1.  7.333 

78 

2.  2542 

101 

3.1917 

143 

3.  6730 

105 

2.7000 

121 

3.  0667 

1.38 

3.  rmo 

157 

3.5000 

157. 

3.  2364 

145 

3.  2773 

147 

3. 9909 

179 

4. 1875 

188 

4.  2708 

190 

4.2500 

189 

3S14.  7.500 

18.  0909 

<  21.  2917 


*  19. 1667 

<  19. 0000 

*  19.  0000 

<  28.  0000 

30.0000 


30.0000 
22. 0000 


Price  per 

ton. 


St.  Louis, 


Price  p>er 
ton. 


$21.2727  i 

<  23. 3333     S21.250O 
30.  2500      23. 2250 


122.0000 
'  22.  6667 

<  24.  00f)0 

*  24.  6667 

25.  0000 
25.  0(X)0 
35.  5(X>0 

<  35.  5000 

*  35.  5000 
■'  35.  5000 


18.0000 
22.  0000 
22.  5<XK) 
22.5000 

21.0000 

24.  0000 

22.  50(W 

5  25.  4000 

5  29.  0667 
s  26.  4000 


6.  Mexi- 
can and 
Texaco 
in  pack- 
ages. 


Pallas. 


Price  per 
ton. 


7.  Califor- 
nia 
l>rand  in 
packages. 


San  Fran- 
cisco. 


Price  per 
ton. 


S21. 37.50 
30.7500 

19.0000 
19.  (MK)0 
22.  .5000 
25.0000 

29.0000 
30. 3.333 
31.  6667 
32.0000 

32.0000 
32.0000 


SIO.  7273 
15. 0833 
1.5.  95S3 

14.8333 
14.5000 
14.5000 
16.5000 

1.5.5000 
15.5000 
16. 3333 
16.5000 

17.0000 
17.0000 


'  Barrel,  280  pounds. 

3  1913,  1914,  1915,  barrel  of  50  gallons;  lOlfi,  1917,  191^ 

1919,  barrel  of  48  gallons. 
3  Figures  for  second  half  of  year. 


<  Mexican  brand. 

*  Stanolind  brand. 

6  Estimates  based  on  New  York  jirices 


T.^Bi.E  80. — J^liolesale  marlcet  prices  on  expanded  metal  lath,  Ga.  27;  weight,  23S;  painted, 
[Prices  per  100  yards  in  carload  lots.    Figures  from  the  Engineering  News-Record.] 


Market . 


Period. 


New 
York. 


Pitts- 
burgh. 


,St.  Louis. 


Chicago.     Dallas. 


San 
Francisco. 


1915:  Fourth  quarter 

1916; 

First  quarter 

Second  ciuarter 

Third  quarter 

Fourth  quarter 

1917: 

First  qu:TTter 

Second  quarter 

Third  ([uartor 

Fourth  quiuter 

1918: 

First  quarter 

Second  quarter 

Third  quarter 

Foiutli  quarter 

1919: 

First  quarter 

April 

Advance  April,  1919,  over  first  quarter 
1917 ix;r  cent.. 


-SU.4400 


$13.3800 


15. 1733 
18.7000 
19.8000 

21.  0200 
25.  4400 
31.0000 
31.0000 

30.9900 
30. 9700 
34.  0700 

33.  0467 

34. 0700 

34.  0700 


16.  6900 
1&.5000 
18.5000 

23.0000 
27.  I(i67 
32.0000 
33.0000 

33.0000 
33.  O.'vJS 
33.2.500 
33.2500 

33.2500 
33.2500 


'$18.0000 
19.8000 
19.8000 

21.0000 
26.0000 
32.  6667 
34.0000 

34.0000 
34.0000 
34.0000 
34.0000 

34.0000 
34.0000 


S18.1500 
17.  4767 

21.0000 
25. 3333 
30.0000 
31.0000 

31.0000 
31.0000 
31.0000 
31.0000 

31.0000 
31.0000 


i  820. 0000 
23.5000 
31.0000 
32.0000 

32.0000 
32.5000 
32.5000 
33.0556 

33.8044 
34.7500 


$1&  1.500 
17.8800 

19.0000 
25.6667 
29.0000 
29.0000 

29.0000 
29.0000 
32.0000 
38.0000 

3&0000 
38.0000 

100 


>  Figure  for  June,  1916. 


Figure  for  March,  1917 


IV.  LABOR  AND  WAGES  IN  THE  CONSTRUCTION  INDUSTRY. 

NEW  CONDITIONS. 

The  exigencies  of  the  war  demanded  both  new  types  of  construction 
and  a  new  geogi^aphical  distribution  of  construction.  These  new 
factors  affected  buikling  tradesmen  in  a  variety  of  ways.  The  new 
types  of  construction,  while  increasing  the  demand  for  certain  groups 
of  building  craftsmen,  lessened,  sometimes  to  the  point  of  elimination, 
the  demand  for  certain  other  gi-oups.  Tlie  new  geogxaphical  distri- 
bution, at  the  same  time  that  it  favored  many  workmen,  compelled 
others  to  pl}^  their  trade  away  from  home  or  to  engage  in  other  occu- 
pations. Conditions  such  as  these  make  difficult  a  comparison  of  the 
status  of  building  craftsmen  in  general  in  1918  with  their  status  in 
prewar  years. 

Some  idea  of  the  adverse  effect  of  the  war  on  certain  craftsmen  may 
be  gained  from  a  report  of  the  proceedings  of  the  twelfth  annual  con- 
vention of  the  Buildings  Trades  Department  of  the  American  Feder- 
ation of  Labor,  held  at  St.  Paul,  Minn.,  June  5,  1918.  On  page  78  of 
this  report  is  printed  a  resolution  (which  was  adopted  by  the  building 
trades  department)  to  the  following  effect: 

Whereas  our  Government  was  compelled  to  declare  war  against  Germany  after 
n  ffering  many  indignities  at  the  hands  of  the  Imperial  Government  of  Germany;  and 

WTiereas  the  declaration  of  war  found  our  Government  wholly  unprepared  and,  in 
order  to  meet  emergencies  for  the  housing  of  enlisted  men,  was  compelled  to  build 
cantonment  buildings.  The  time  to  meet  this  emergency  being  limited  compelled 
our  Government  to  construct  these  buildings  in  a  temporary  manner,  and  naturally 
the  haste  required  made  it  necessary  to  omit  certain  details  in  the  construction  of  these 
buildings  which  would  have  a  direct  tendency  to  protect  both  the  health  and  the 
comfort  of  our  boys  who  are  to  fight  the  battles  for  the  preservation  of  democracy  and 
freedom;  and 

"VSTiereas  our  Government  can  no ,v  take  the  time  and  secure  the  men. to  make  these 
buildings  more  sanitary-  and  more  comfortable  for  our  boys  by  plastering  the  same; 
and 

AMiereas  the  plastering  of  these  buildings  means  the  saving  of  thousands  of  tons  of 
coal  in  the  heating,  and  as  coal  is  one  of  the  necessaiy  essentials  in  the  winning  of  the 
war,  we  feel  it  should  be  the  plain  duty  of  our  Government  to  conserve  the  consumj)- 
tion  of  coal  in  every  manner  possi])!e:  Therefore  be  it 

Resolved,  That  the  delegates  attending  this  convention  are  of  the  unanimous  opinion 
that  these  buildings  should  be  plastered  and  painted  for  the  reason  herein  stated ;  and 
h)e  it  further 

Resolved,  That  a  committee  of  three  be  apiiointed  by  the  president  of  the  building 
trades  department  to  act  in  conjunction  with  him  in  presenting  this  matter  to  the 
proper  authorities  in  Washington. 

In  addition  to  the  patriotic  concern  evinced  by  this  ri^solution,  it 
is  patent  that  the  plasterers  and  painters,  who  had  suffered  through 
121297°— 19 12  1"7 


178  ECONOMICS   OF   THE   CONSTRUCTION   INDUSTRY. 

lack  of  employment  in  their  trades,  were  desirous  of  the  employnient 
which  the  concurrence  hy  the  Government  in  their  resolutions  would 
insure.  At  least  such  is  the  interpretation  that  the  annual  report  of 
1  lie  executive  council  of  the  huilding  trades  permits.  On  page  45  the 
executive  council  reports: 

There  waa  submitted  to  your  couucil  a  .series  t)i  commuuication.s  from  President 
Uedricks,  of  the  Brotherhood  of  Painters  and  Decorators,  urging  that  necessary  frteps 
1)6  taken  by  the  department  in  cooperation  with  the  Brotherhood  of  Painters  toward 
securing  employment  for  the  members  of  the  brotherhood  on  cantonment  camps,  aa 
well  as  the  general  building  program  of  the  Government.  The  correspondence  v.-aa 
supplemented  by  letters  from  the  District  Council  of  Painters  of  Indianapolis,  Ind., 
in  which  a  similar  req uest  was  made .  The  importance  of  direct  action  on  the  subject 
was  deemed  to  be  advisable,  and  accordingly  your  executive  council  instructed  the 
officers  to  take  up  the  matter  with  the  pro])er  authorities  and  urge  that  all  camps  and 
other  Government  operations,  especially  frame  structures,  be  treated  to  an  application 
of  paint.  This  coui'se  was  deemed  necessary  in  order  to  prevent  deterioration  on 
account  of  changing  climatic  conditions  and  to  make  the  quarters  of  the  enlisted  men 
comfortable  and  sanitary,  as  well  as  to  alleviate  the  distress  caused  by  the  nonem- 
ployment  of  the  Brotherhood  of  Painters  generally. 

A  discussion  of  the  resolution  introduced  by  the  International  Hod 
Carriers,  Building,  and  Common  Laborers*  Union,  on  the  question  of 
chartering  shipbuilding  laborers  is  Ukewise  illuminating  as  to  the 
status  of  certain  trades: 

Delegate  Bowen,  Bricklayers  and  Masons,  oppo!5ed  the  recommendation  of  the 
committee.  He  stated  that  bricklayers,  owing  to  conditions  imposed  upon  the 
industries  because  of  war  activities,  were  working  aa  laborers,  and  insisted  that  they 
should  not  be  compelled  to  become  members  of  the  Hod  Carriers  and  Building  Laborers, 
but  should  be  allowed  to  retain  their  cards  in  the  organization  of  the  trade  to  which 
they  belonged,  in  which  they  have  pride,  and  which  they  spent  years  to  learn. 

Delegate  Leonard,  Plumbers,  stated  that  he  would  not  oppose  any  program  that 
would  help  to  completely  organize  the  building  laborers,  as  he  felt  the  real  foundation 
of  all  future  success  of  organized  labor  rested  upon  the  thorough  organization  of  com- 
mon labor.  He  spoke  at  length  of  the  change  in  industiy  since  the  beginning  of  the 
war,  the  necessity  of  skilled  workers  in  some  crafts  taking  positions  where  little  or  jio 
skill  is  required,  sometimes  because  of  a  scarcity  of  common  labor  and  in  other  instances 
because  of  a  lack  of  employment  in  theii'  own  trades. 

But  in  spite  of  the  abnormal  conditions  prevailing  in  the  construction 
industry,  building  tradesmen  did  not  suffer  that  woi"st.  of  all  industrial 
evils — unemployment.  Work  ^uas  procurable,  if  not  in  all  interior 
sections,  at  least  along  the  coasts,  and  in  large  industrial  communities; 
and  if  not  in  the  building  trades,  at  least  iu  other  trades. 


ECONOMICS  OF   THE   CONSTEUCTIOX   IKDUSTEY.  179 

THE  ATTITUDE  OF  THE  GOVERNMENT  TOWARD  LABOR  IN  THE 
CONSTRUCTION  INDUSTRY. 

The  attitude  of  the  Government  toward  labor  in  construction 
industry  is  briefly  summarized  in  the  statement  of  June  7,  1917. 
issued  by  the  War  Department  and  signed  by  Newton  D.  Baker  and 
Samuel  Gompers: 

For  the  adjustment  and  control  oi  wages,  hours,  and  conditions  of  labor  in  the  con- 
struction of  cantomnenta  there  shall  be  created  an  adjustment  commission  of  three 
persons,  appointed  by  the  Secretary  of  War;  one  to  represent  the  Army,  one  the  pub- 
lic, and  one  labor;  the  last  to  be  nominated  by  Samuel  Gompers,  member  of  the 
advisory  commission  of  the  Council  of  National  Defense,  and  i^resident  of  the  American 
Federation  of  Labor. 

As  basic  standards  with  reference  to  each  cantonment,  such  commission  shall  use 
the  union  scale  of  wages,  hours,  and  conditions  in  force  on  June  1,  1917,  in  the  locality 
where  such  cantonment  is  situated.  Consideration  shall  be  given  to  special  circum- 
stances, if  any,  arising  after  said  date  which  may  require  particular  advances  in  wages 
or  changes  in  other  standards.  Adjustments  of  wages,  hours,  or  conditions  made  by 
such  boards  are  to  be  treated  as  binding  by  all  parties. 

The  reference  to  conditions  in  force  on  June  7,  1917,  was  inter- 
preted by  Mr.  Gompers  and  the  War  Department  as  referring  only 
to  miion  hours  and  wages  and  not  to  the  closed  or  open  shop. 

To  what  extent  the  union  wage  rate  of  the  community  was  the 
prevailing  rate  on  Government  construction  it  is  impossible  as  yet 
to  determine.  Industrial  relations  divisions  of  various  govermental 
agencies  that  had  to  do  with  the  employment  of  building  trades  lal>or 
made  it,  of  course,  their  policy  to  engage  labor  at  the  most  advan- 
tageous r'ate  possible  under  the  Government  policy.  That  rate  could 
be  no  lower  than  the  union  wage  scale  of  the  community  concerned. 
The  Building  Trades  Department  of  the  American  Federation  of 
Labor  registered  protests  against  the  action  of  certain  contractoi-s 
who  were  paying  less  than  the  prevailing  rate  of  wages,  but  such 
conditions  were  quickly  remedied  by  governmental  agencies  to  whose 
attention  they  were  called. 

However,  the  ever  increasing  shortage  in  labor  and  the  ever  more 
insistent  demand  for  emergency  construction  during  the  year  1918 
developed  in  certain  communities  rivah'ies  among  contractors  for 
building  craftsmen.  As  a  result  wages  in  excess  of  the  miion  scale 
were  paid  and  by  the  end  of  the  year  1918  such  wages  were  conmion. 

The  report  of  the  Industrial  Relations  Division  of  the  United 
States  Housing  Corporation  throws  an  interesting  light  on  the  de- 
velopment of  the  labor  situation  in  the  building  trades  in  the  latter 
part  of  1918,  The  Housing  Corporation  began  its  work  in  August 
and  found  that  common  labor  had  been  absorbed  by  other  war  in- 
dustries of  the  Government  and  that  it  had  to  enter  into  the  market 
for  labor  with  the  supply  almost  completely  exhausted.  By  November 
1,  after  employing  numerous  field  agents  to  scout  for  labor  and  call- 


180  ECONOMICS   OF   THE    CONSTRUCTION   INDUSTRY. 

ing  upon  the  United  States  Employment  Sprvice,  it  was  able  to  man 
its  projects  only  to  the  extent  of  50  per  cent.  The  experiences  of  tlie 
Housing  Corporation  can  not  therefore  be  looked  \ipon  as  typical — 
they  show  somewhat  extreme  conditions.  To  quote  from  Frank  J. 
Wame,  manager  of  the  Industrial  Relations  Division : 

There  being  no  centralized  governmental  control  over  wages,  hours  of  work,  and 
general  working  conditions,  each  contractor  and  each  Government  department  was 
a  law  unto  himself  and  itself.  The  hourly  rate  for  common  labor  rose  within  a  few 
months  from  25  cents  to  as  high  as  60  cents  in  places.  Hours  of  work  were  increased 
from  8  for  each  week  day,  excepting  Saturday,  to  as  high  as  14.  The  Saturday  after- 
noon holiday  went  a  glimmering,  work  thereon  ])eing  paid  for  at  time  and  a  half 
and  double  for  overtime  above  four  hours.  Sunday  work  with  double  pay  in  many 
instances  became  the  rule,  in  order  to  secure  and  hold  the  men.  The  "stealing"  of 
labor  by  one  department  of  the  Government  from  another  was  an  almost  daily 
occurrence. 

In  the  matter  of  wage  scale  the  policy  of  the  division  has  been  to  instruct  the  con- 
tractor to  secure  a  copy  of  the  rates  of  wages  and  working  time  in  any  particular 
locality  from  the  examiner  in  charge  of  the  nearest  branch  of  the  United  States  Em- 
ployment Service  and  not  to  vary  from  these  established  rates  and  conditions  without 
instructions  from  the  division.  But  in  very  few  localities  were  the  established  rates 
being  observed,  and  the  Industrial  Relations  Division  soon  found  itself  involved  in  a 
contest  of  wage  increase.  In  only  two  instances,  so  far  as  the  manager  of  the  division 
is  aware,  were  the  contractors  of  the  Housing  Corporation  the  first  to  vary  from  the 
established  local  rates. 

The  difficulties  of  the  United  States  Housing  Corporation  were 
further  accentuated  by  the  award  of  the  Wage  Adjustment  Board  of 
the  United  States  Shipping  Board.  This  award  increased  wages 
15  per  cent  to  meet  the  increase  in  the  cost  of  living  and  as  a  result 
common  labor  was  advanced  from  46  cents  to  54  cents.  The  Housing 
Corporation  decided  not  to  meet  the  increase  of  the  Shipping  Board 
and  hence  lost  a  large  number  of  its  carpenters  and  other  craftsmen 
to  the  Emergency  Fleet  Corporation. 

WAGES  AND  THE  COST  OF  LIVING. 

Earnings  in  1914  and  1918. 

It  is  as  3'ct  impossible  to  present  an  adequate  sun-ey  of  the  effect 
of  the  war  on  wages  of  American  workmen,  for  statistics  on  wages 
are  not  yet  sufficiently  available.  lu  addition,  the  abnormal  con- 
ditions which  prevailed  durmg  191S  make  necessary  a  much  more 
carefid  use  of  the  available  data  of  that  year  and  render  dangerous 
generalizations  based  on  partial  data.  The  latest  and  most  com- 
prehensive survey  of  wages  for  the  years  1914-191 S  available  is  con- 
tained in  the  Labor  Market  Bulletins  published  by  the  Bureau  of 
Labor  Statistics  of  New  York  State.  In  these  bulletins  the  average 
weekly  earnings  of  New  York  State  factories  are  given  for  the  years 
1914  to  1919.  In  Table  SI  only  the  years  1914  and  191S  are  used. 
The  weeklv  earnings  of  1918  are  those  of  the  last  week  in  December. 


ECONOMICS    OF   THE    COXSTEUCTIOX    INDUSTRY. 


181 


Comment  on  Table  81 :  The  workmen  Avho  gained  most  during  these 
veai-s  were  those  in  the  metals,  machinery,  and  conveyance  group, 
whose  earnings  increased  from  $14.24  to  $27.39,  or  92.3  per  cent.  In 
that  group  the  workmen  of  the  cars,  locomotives,  and  railway  repair 
shop  group  received  the  greatest  increase,  from  $14.34  to  $34.07,  or 
137.5  per  cent.  Tiie  wages  of  workmen  in  the  pig  iron  and  roUing- 
mills  product  group  v/ere  advanced  from  $16.63  to  $37.97,  or  129.2  per 
cent.  The  workmen  in  the  printing  and  paper-goods  industry  bene- 
fited least.  Their  wages  were  increased  from  $15.16  to  $22.67,  or  49.6 
per  cent.  The  varying  increases  in  wages  in  these  different  groups  re- 
sponded in  a  general  way  to  the  war  demand  on  the  industries  repre- 
sented by  these  groups.  Tke  workmen  in  the  metals  group,  whose 
industry  was  most  in  demand,  enjoyed  the  greatest  increase. 

The  United  States  Bureau  of  Labor  Statistics  has  computed 
index  figures  of  average  weeldy  earnings  in  New  York  State  factories, 
these  indices  being  based  on  the  average  for  June,  1914,  as  100  per 
cent.  The  indices  arc:  Januar}-,  1919,  181;  February,  1919,  174; 
March,  1919,  175;  April,  1919,  174;  May,  1919,  175;  June,  1919, 
177.  The  decrease  from  the  1918  average  is  probably  largely  due 
to  the  decrease  in  amounts  of  pay  for  overtime,  etc. 

The  Bethlehem  Steel  Corporation  released  to  the  press  in  April, 
1919,  a  statement  of  the  average  number  of  its  employees,  the  total 
wages  paid,  and  the  average  wages  paid  per  employee  j^er  month,  for 
the  3'ears  1909  to  1918. 

In  the  table  below  the  wages  per  month  and  per  week  for  the  3-ears 
1913  to  1918  are  given  and  the  percentage  increase  from  1913  to 
1918  and  from  1914  to  1918. 


Year. 

Average 
number  of 
employees. 

Salaries  and 
wages  paid. 

Average  per 
employee-- 

Per  month. 

Per  week. 

1913 

15,052 
15,  o)>ii 
22,061 
47,01-5 
64, 782 
93,964 

S13,366,399.92 
14,312,948.  7.S 
21,300,664.91 
51, 499, 773.  4r. 
83,978,312.80 

167,118,484.14 

S74.00 
76.53 

82.  ;•!  1 

91.  2S 
108. 0:5 
148. 21 

$17.07 

1914 

17.66 

1915 

19.00 

1916 

21.06 

1917 

24.93 

191S 

34.20 

rereentageinprease,  191.3-1918,  100.3. 
I'tToentage  increase,  1914-1918,  93.6. 


Comment:  The  increase  hi  weekly  earning  of  the  employees  of 
the  Bethlehem  Steel  Corporation  from  1914  to  1918,  93.6  per  cent, 
corresponds  almost  exactly  to  the  increase  m  weekly  earnings  of 
the  workmen  in  the  metals,  machmery,  and  conveyance  group  in 
New  York  State  factories,  92.3  per  cent. 


182 


ECONOMICS   OF   TUV:   CJONSTRUCTTON   INDUSTRY. 


Union  wage  rales  from  1913  to  1918. 

TJio  Bureau  of  Lal)oi'  vStatislics  piihlislicd  in  tlic  Moiitiily  Labor 
Kovicw  of  March,  1919,  a  scale  of  tlio  changes  in  the  union  wage 
rates  from  1907  to  191 S.  The  years  that  concern  us  here,  1913  to 
191 S,  are  <i;iven  in  the  tiil)le  helow: 

[191;},  100  per  cent.] 


Year. 

Rates  of 

vages 
per  hour. 

Full-timp 

hoiUM 
perwet'k. 

Kutea  of 

per  week, 
full  timo. 

191.i. . .                             

100 
102 
103 
107 
114 
133 

100 
99 
99 
98 
97 

100 

1011 

lOJ 

1915                                      

102 

lOH) 

10«i 

KU"                                          

112 

lOlS 

1:50 

The  following  trades  are  covered  by  the  report  of  the  Bureau  of 
Labor  Statistics  on  uni(ui  wage  rates: 

1.  Buildhig  trades. 

2.  Granite  and  stone  trades. 

3.  Metal  trades. 

4.  Laundry  workers. 

5.  Theatrical  employment. 

6.  Waiters. 

7.  Printing  and  publishing:  Book  and  job. 
S.  Chauffeurs,  teamsters,  and  drivers. 

9.  Bakery  trades. 

10.  Mill  work. 

11.  Printhig  and  publishing:  Newspaper. 

The  metal  trades  show  a  rather  large  increase  in  the  union  wage 
rate  of  1918  over  1914.  A  comparison  of  the  houi'ly  rate  of  191S 
with  that  of  1914  for  41  important  American  cities  ^  gives  the 
following  results : 


Per  cent. 

Machinists,  railroad  and  shop 75 

Metal  i)ulishers  and  buffers 51 

Iron  molders 59 


Per  cent. 
Pattern  makei"s 69 

Blacksmiths,  manufacturing  shop? .  . .  66 
Blacksmiths,  railroad  shops 74 


'  The  cities  are: 
Athmta,  (ia. 
Baltimore,  Md. 
Birmiugham,  Ala. 
Bo.ston,  Mass. 
Buflalo,  N.  Y. 
Ciiarleston.  S.  C. 
Chicago,  111. 
Cincinnati,  Ohio. 
Cleveland,  Ohio. 
I>;illa.s  Tex. 
Denver,  Colo. 


Detroit,  Mich. 
Fall  lUver,  Ma.ss. 
Indianapolis,  Ind. 
Jacksonville,  Fla. 
Kansas  City,  Mo. 
Little  Rock,  Ark. 
Las  Angeles,  Calif. 
Louisville,  Ky. 
Manchester,  N.  H. 
Memphis,  Tenn. 


Milwaukee,  Wis. 
Minneapolis,  Minn. 
Newark,  N.  J. 
New  Haven,  Conn. 
New  Orlean5,  La. 
New  York,  N.  Y. 
Omulia,  Nebr. 
Pliiladelphia,  Ph. 
Piti.sburgh,  Pa. 
Portland,  Oreg. 


Providence,  R.  I. 
Richmond,  Va. 
St.  Louis,  Mo. 
St.  Paul,  Minn. 
Salt  Lake  City,  Vulu 
San  Francisco,  Calif. 
Scranton,  Pa. 
Seattle,  Wash. 
Sprins,Tleld,  III. 
Washington,  D.  C. 


ECOITOMICS   OF   THE   COXSTEUCTIOX   IXDUSTKY.  183 

Granite  cutters  for  tlie  same  cities  received  an  increase  of  27  per 
cent.  Among  the  groups  which  obtained  only  shght  increases  in 
hourly  wage  rates  are  those  in  the  newspaper,  prmting  and  publishing, 
and  book  and  job,  printing  and  publishing,  groups. 

Union  wage  rates  in  the  building  trades  in  1914  and  1918. 

Table  82  gives  figures  on  average  union  wage  rates  in  the  building 
trades.  Table  83  gives  figures  in  detail  for  41  cities,  and  Table  84 
gives  a  summar}'  of  Table  83. 

The  average  increase  in  the  union  wage  rate  of  building  trades 
labor  from  1914  to  1918  is  28.5  per  cent.  This  increase  applies  only 
to  the  41  important  American  cities  given  above.  Below  is  the  table 
of  the  average  increase  of  some  of  the  trades  in  the  building  industry: 


Per  cent. 


Per  cent. 


Plasterers 18.  -5 

Plasterers'  helpers 30.  2 

Plumbera  and  gas  fitters 31.  4 

Sheet-metal  -workers 33.  7 

Steam  fitters 32.  9 

Steam  fitters'  helpers 40.8 

Stonemasons 22. 1 

Structm-al  iron  TTorkers 28.  8 

Structural  workers'  helpers 30.  2 

Tile  layers 15.  0 

Tile  lavers"  helpers 19.  2 


Bricklayers 19.  7 

Building  laborers 56.  7 

Carpenters 36.  2 

Cement  workers  and  finishers,  in- 
side."   29.1 

Engineers,  portable  and  hoisting. .  24.  9 

Hod  carriere 41. 1 

Inside  workmen 40.  3 

Marble  setters 13.  7 

Marble  setters'  helpers 24.  7 

Painters 34.  4 

Sign  painters 20.  4 

An  examination  of  these  increases  shows  that  unskilled  labor — 
building  laborers,  hod  carriers,  and  helpers — enjoyed  as  a  rule  far 
greater  increases  than  skilled  labor. 

Tlie  average  increase  from  year  to  year  in  the  union  wage  rate 
of  the  building  trades  are  shown  graphically  in  Chart  XIII. 

Union  wage  rates  and  the  war. 

The  union  wage  rates  of  Tables  82,  83,  and  84  are  those  of  May  of 
each  year.  It  must  be  remembered  that  union  wage  rates  are  mini- 
mum wage  rates.  A  comparison  of  the  union  wage  rates  of  one 
year  vnih  those  of  another  would,  in  normal  years,  provide  a  fairly 
accurate  index  of  the  relative  earnings  of  those  yeai^s.  However, 
conditions  in  1918  were  so  different  from  those  existing  in  1913 
that  it  is  not  safe  to  say  that  the  index  number  of  the  earnings  of 
1918  corresponds  with  the  index  number  of  the  rates  of  wages  of  191 S. 

The  reasons  for  assuming  a  dis]:)arity  in  the  index  number  of  the 
union  wage  scales  and  in  the  index  number  of  earnings  may  be  found 
in  the  following  considerations:  As  a  result  of  the  ])ressure  of  war 
work  and  of  the  shortage  of  labor,  it  may  safely  l)e  said  of  industry 
in  general  in  1918  (1)  that  employment  was  more  continuous  than 
in  1913;    (2)  that  overtime  figmcd  more  largely  than  in  1913;    (3) 


184  ECONOMICS    OF   TTl  H    CONSTRUCTION    INDUSTRY. 

that  Avagos  in  excess  of  the  uiiioi)  wage  luiniiiium  woi-e  jjaid  more 
frequentlN'  than  in  ]9i;i;  (4)  that  th(3  union  wage  rate  of  May,  191S, 
was  far  less  frequently  the  wage  rate  of  the  whole  j'ear  than  the  cor- 
responding rate  was  in  1913. 

In  those  trades  and  in  those  communities  in  which  one  or  more  of 
these  factors  was  oi)erative  in  1918  (other  conditions  remaining  the 
same)  the  index  number  of  total  earnings  of  1 91 8  would  be  considerably 
above  the  index  number  of  the  rates  of  loages  of  1918.  It  is  certain 
that  in  some  trades  the  general  conditions  of  1913  wath  respect  to 
overtime,  continuity  of  employment,  and  observance  of  the  union 
wage  rate  applied  in  1918.  In  general  it  seems  safe  to  assume  that 
one  or  more  of  these  factors  was  cfTectivc  in  1918  and  that  hence 
tlie  index  number  of  earnings  for  1918  ivas  raised  above  that  of  wage 
rates.  It  is  difRcult,  however,  on  the  basis  of  present  information  to 
hazard  an  estimate  even  as  to  the  approximate  position  of  that 
index  number. 

Adjusting  wages  to  the  cost  of  living. 

The  rapid  rise  in  the  cost  of  Hving  dming  the  war  necessitated  the 
recognition  on  the  part  of  the  Goverimient  of  a  policy  of  adjusting 
wages  to  meet  the  increase  in  the  cost  of  Hving.  By  imphcation 
such  a  policy  is  contained  in  the  principles  adopted  by  the  War  Labor 
Conference  Board  and  followed  by  the  National  War  Labor  Board, 
under  the  caption — ■ 

The  Livixfi  Wage. 

1.  The  right  of  all  v.-orkeis,  including  rommon  laborers,  to  a  liA-ing  wage  is  hereby 
declared. 

2.  In  fixing  wages,  minimum  rates  of  pay  shall  be  established  which  •vrill  insure 
the  subsistence  of  the  worker  and  his  family  in  health  and  reasonable  comfort. 

The  memorandmn  creating  the  Shipbuilding  Labor  Adjustment 
Board  provides  stiU  more  clearly  the  ground  for  readjustment  of 
w^ages: 

At  any  time  after  six  months  have  elapsed  following  such  ratilied  agreement,  or 
any  such  final  decision  by  the  adjustment  board  on  any  question  as  to  wages,  hours, 
or  conditions  in  any  plant  or  district,  such  question  may  be  reopened  by  the  adjust- 
ment board  for  adjustment  upon  the  request  of  a  majority  of  the  craft  or  crafts  at 
such  plant  affected  by  such  agreement  or  decision,  pro\-ided  it  can  be  shown  that 
there  has  been  a  general  and  material  increase  in  the  cost  of  li\'ing. 

As  a  result  of  these  pohcies  on  the  part  of  governmental  agencies, 
the  demands  of  worlcmen  were  as  never  before  considered  with  respect 
to  the  increase  in  the  cost  of  Uving.  In  nonnal  years  the  demands 
of  workmen  for  higher  wages  are  usually  interpreted  as  demands  for 
greater  shares  in  the  profits  or  for  better  standards  of  hving,  or  for 
both.  Though  those  factors  were  still  operative  among  workmen  in 
1918,  it  is  obvious  that  with  the  rapid  advances  in  the  cost  of  living, 


ECOXOMICS    OF   THE    COXSTRUCTIOX    TXDrSTEY. 


185 


the  compelling  cause  of  an  increase  in  wage  rates  among  workers  in 
general  was  the  necessity  for  meeting  the  increase  in  the  cost  of  living. 
In  order  to  obtain  reliable  figures  for  the  increase  in  the  cost  of 
living,  upon  which  to  base  wage  increases,  the  Shipping  Board 
requested  the  Bureau  of  Labor  Statistics  of  the  United  States  Depart- 
ment of  Labor  to  make  a  statistical  investigation  of  the  increase  in 
the  cost  of  living  for  workers.  The  Bureau  of  Labor  Statistics  under- 
took accordingly  a  sui-vey  of  living  conditions  in  shipbuilding  com- 
munities and  pubhshed  at  certain  intervals  the  increase  in  the  cost 
of  living  reflected  in  those  communities.  The  decisions  of  the  Ship- 
buddmg  Labor  Adjustment  Board  were  based  on  the  findings  of  this 
bureau.  The  award  of  the  Shipbuilding  Labor  Adjustment  Board  of 
October  1,  1918,  however,  did  not  apply  the  entire  increase  in  the 
cost  of  living  to  all  occupations.  In  the  more  higlily  paid  occupa- 
tions the  Shipping  Board  felt  justified  in  not  granting  the  full  increase 
for  the  reason  quoted:  ''We  have  not  deemed  it  necessary  or  wise  to 
apply  this  entire  increase  in  the  cost  of  living  to  occupations  already 
above  the  base  rate  of  the  scale  for  the  skilled  trades.  As  in  assessing 
the  income  tax,  the  Government  exempts  altogether  small  incomes 
while  taking  more  than  three-fourths  of  the  income  of  the  multi- 
milhonaire,  so  in  adjusting  v/ages,  while  granting  an  advance  to 
laborers  and  helpers  fully  sufficient  to  offset  the  increase  in  the  cost 
of  living,  we  have  not  considered  it  proper  to  grant  the  full  increase 
to  the  more  highly  paid  occupations." 

Increase  in  the  cost  of  living. 

The  investigations  of  the  Bureau  of  Labor  Statistics  into  the 
increase  in  the  cost  of  living  for  workers  in  shipbuilding  communities 
show  the  following  percentages  of  increase  for  December,  1917,  and 
December,  1918,  over  December,  1914. 


City. 

December, 

1917. 

December, 

1918. 

'                      f..^                          December. 
1                       <^'f>-                              1917. 

Decembar, 

1918. 

Baltimore,  Md  .. 

Per  cent. 
51.27 
38. 13 
51. 13 
41.78 
42. 9.3 
49.85 
41.89 
41.63 
28.8.5 
43.16 

Per  cent. 
86.37 
70.29 
82. 33 
74.14 
73.90 
79.80 
74.61 
79.88 
58.88 
72.39 

1  New  York,  N.  Y 

Per  cent. 
44.68 
45.  15 
43.  81 
37. 96 
31.23 

28. 63 
42.  49 
31.0.H 

Per  cent. 
78.79 

Norfolk,  Va 

80.73 

IJulTalo,  N.  Y  ..  . 

Philadelphia,  Pa 

75.02 

Chicago,  III 

Port  land ,  Me 

72.38 

Cleveland,  Ohio. . . 

Portland,  Orcg 

&5.50 

Detroit,  Mieh 

San  Francisco  and  Oakkmd, 
Calif 

Houston,  Tex 

58.38 

68. 63 

Los  Angeles,  Calif. . 

Seattle,  ^\  ash 

7n.  47 

Average 

41.04 

73.47 

Cost  of  living  computations  upon  which  to  base  conclusions  for  the 
whole  country  have  not  yet  been  tabulated  by  tlie  Bureau  of  Labor 
Statistics.  It  is  not  unlikely  that  the  shipbuilcHng  communities 
chosen  are  typical  of  industrial  communities  which  benefited  from 


186  ECONOMICS  or  the  constructiox  industry. 

war  activity.  Additional  figures  indicate  that  the  average  increase 
in  tlioso  shipbuilding  coiiuuunities  for  June,  1919,  would  be  somewhat 
:ibc)Vo  the  figur(^  for  ]>eceiii])er,  1918 — somewhere  about  76  or  77  per 
cent,  probably.  The  increases  in  1919  are  due  to  increases  in  cost 
of  food  in  the  second  quarter  of  the  year  and  also  to  increases  m 
rents. 

The  National  Industrial  Conference  Board  makes  estimates  of  the 
increase  in  the  cost  of  living  for  the  whole  country  based  upon  prices 
gathered  by  the  Bureau  of  Labor  Statistics  and  upon  its  own  investi- 
gation. It  has  pubhshed  two  sets  of  figures  for  1918;  one  on  the 
cost  of  living  increase  between  July,  1914,  and  June,  1918,  50  to  55 
per  cent;  the  other,  the  increase  between  July,  1914,  and  November, 
1918,  65  to  70  per  cent. 

A  comparison  of  the  increase  in  the  wage  scale  of  the  buikhng  trade3 
with  increases  in  the  various  elements  of  the  cost  of  li^  ing  is  shown 
graphically  in  Chart  XIV. 

The  cost  of  living  and  wages  in  1918  with  particular  reference  to  the 
wage  rate  in  the  building  trades. 

Workmen  in  the  metals  group,  particularly',  enjoyed  mcreases 
greater  than  the  increase  in  the  cost  of  living.  Workmen  in  many 
tether  factory  groups,  if  the  New  York  factory  statistics  may  be 
looked  upon  as  t\^pical,  enjoyed  mcreases  approximating  the  mcrease 
in  the  cost  of  living.  Unskilled  workers  and  common  labor,  as  a 
result  of  the  application  of  the  living  wage  principle  and  of  the 
shortage  of  this  type  of  labor,  seem  usually  to  have  increased  their 
earnings  at  least  in  proportion  with  the  increase  in  the  cost  of  living. 

The  index  number  of  the  wage  rate  for  1918  of  many  groups, 
among  them  the  buildmg  trades  and  the  printing  groups,  is  consid- 
erably helow  that  of  the  mdex  nmnber  of  the  cost  of  living.  The 
disparity,  however,  between  the  index  number  of  the  cost  of  living 
of  1918  and  that  of  the  wage  rate  in  the  building  trades  of  1918,  does 
not  mean  that  there  has  not  been  a  considerable  readjustment  of 
wage  rates  in  the  buUduig  trades  to  meet  the  increase  in  the  cost  of 
living  since  America  entered  tlie  war  in  1917.  The  mdex  numbers 
for  the  cost  of  living  and  the  union  wage  rates  all  use  a  1913  or  a 
1914  base.  Many  of  the  wage  adjustments  made  dming  the  war, 
and  notably  those  of  the  Sliipbuildiiig  Labor  -Vdjustment  Board 
use  the  wage  rate  of  1917  as  a  base. 

The  use  of  1917  as  a  base  for  both  the  cost  of  living  and  the  union 
wage  rate  of  the  building  trades  tells  a  different  story.  The  index 
nimiber  of  the  wage  ratr»  for  Ma}',  1917  (with  May,  1914,  as  the  base) , 
is  only  108  for  the  41  cities  mentioned  above.  But  the  index  num- 
ber for  May,  1918  (with  May,  1914,  as  a  biise),  is  over  128;  in  other 
words  an  increase  over  the  new  base  of  1917  of  18  per  cent  in  one 


ECONOMICS   OF   THE   CONSTRUCTION   INDU5TP.Y.  187 

year.  This  increase  corresponds  fairly  closeh-  to  the  increase  in  the 
cost  of  hvmg  for  the  whole  country  during  the  same  year — 15  to 
20  per  cent. 

The  great  disparity  in  the  index  numbers  of  the  cost  of  living  and 
the  union  wage  rate  of  the  building  trades  {vdth  1914  as  a  base)  is 
due  to  the  fact  that  in  the  years  1914,  1915,  and  1916  there  had  beeu 
practically  no  change  in  the  wage  rate.  Even  the  year  1917  saw  but 
a  slight  revision  upward.  Workmen  in  some  other  groups,  particu- 
larly in  the  metals  group,  had  then*  wages  considerabh^  increased 
before  1917  because  of  the  tremendous  demand  for  war  matg:'ials  by 
the  entente  aUies  even  before  America  entered  the  war. 

It  must  be  emphasized  again  that  the  index  number  of  wage  rates 
in  1918  is  not  for  many  building  craftsmen  the  ii\dex  number  of 
then-  earnings  for  1918  and  that  hence  a  comparison  of  the  index 
number  of  the  wage  rate  with  that  of  the  cost  of  living  is  not  always 
fair.  There  is,  however,  in  spite  of  this  consideration,  one  not 
unimportant  justification  for  the  use  of  the  1918  index  nmnber  of 
wage  rates  both  alone  and  in  comparison  with  that  of  the  cost  of 
living.  Li  the  discussion  of  a  new  wage  rate  for  1919,  constant 
.reference  is  made  to  the  wage  rate  of  1918.  That  wage  rate  is 
projected  mto  the  j^ear  1919,  a  post  ])ellum  year,  in  which  normal 
conditions  are  expected  to  prevail.  Its  sufficienc}''  or  iiisuificiency 
is  determhied  more  or  less  by  a  consideration  of  the  pm'chasing 
power  of  that  1918  wage  rate  in  1919.  Hence  a  comparison  of  the 
index  number  of  the  wage  rate  of  1918  with  that  of  the  cost  of  liv- 
ing— though  partially  to  be  rejected  as  pictmung  inaccurately  the 
conditions  of  1918 — has  its  value. 

THE  WAGE  RATE  OF  1919. 

In  the  light  of  these  arguments,  the  following  interpretations  of 
the  wage  rate  of  1919  are  possible: 

1.  Those  building  craftsmen  whose  earnings  were  considerably 
above  those  indicated  by  the  mdex  number  of  their  wage  rate  and 
who  have  asked  for  an  increase  in  then'  wage  rate  for  1919,  have  not 
necessarily  asked  for  an  increase  over  their  earnhigs  for  1918.  They 
have  asked  in  many  instances  for  a  wage  rate  based  upon  the  rates 
they  were  actually  paid  in  1918  (or  upon  their  total  earnings). 

2.  If  those  same  craftsmen  have  agreed  to  the  1918  vrage  rate  for 
1919,  then'  earnings  in  1919  are  likel}"  to  be  considerably  less  than 
their  earnings  were  m  1918.  In  other  words,  they  have  accepted 
a  reduction  in  their  earnmg'S. 

3.  Building  craftsmen  for  whom  the  war  did  not  change  tlie  pre- 
war conditions  with  respect  to  overtime,  continuity  of  employment, 
etc.,  and  wlio  find  the  purchashig  power  of  the  1918  wag-e  rate  greatly 


338  EC0N0M1(;.S   OF   THE   CONSTRUCTION   INDUSTRY. 

decreased  as  c()in|)aro,(l  witli  tliat  of  prewar  years,  may  liave  asked 
lor  a  new  wage  rate  that  shall  provide  only  for  a  ]>etter  adjustment 
ol'  their  earnings  to  the  increased  cost  of  living. 

EFFICIENCY  OF  THE  BUILDING  TRADES. 

As  an  inevitable  result  of  war  conditions,  the  efficiencj^  of  building 
craftsmen  suiTered.  Overtime  and  general  abnormal  conditions  of 
Gm])loyment  produced  their  natural  results.  A  great  deal  of  skilled 
labor  in  the  building  trades  was  diverted  to  other  fields  and  its  i)lace 
was  taken  by  less  efficient  labor.  Inefficient  common  labor  was 
brought  into  the  building  industry.  Labor  turnover,  too,  was  high. 
How  much  efficiency  was  reduced  and  how  widespread  the  reduction 
was  it  is  difficult  to  say,  for  statistics  on  labor  costs  are.  available  in 
only  small  numbers,  but  toward  the  end  of  the  war  reduced  efficiency 
was  apparently  making  itself  felt  more  and  more. 

That  this  reduced  efficiency,  however,  is  looked  upon  as  a  natm-al 
result  of  war  conditions  and  will  not  apply  in  post-war  times  is  shown 
by  the  fact  that  only  74  questiomiaires  on  deferred  building  projects 
out  of  6,472  returned  to  the  Division  of  Public  Works  and  Construc- 
tion Development  mentioned  inefficiency  of  labor  as  a  deterrent  fac- 
tor in  the  building  program  for  1910.  This  feeling  is  supported  by 
the  actual  facts  taken  from  a  study  of  labor  costs  which  were  made 
by  Mr.  Morton  Chase  Tuttle,  who  served  as  a  production  manager 
for  the  United  States  Emergency  Fleet  Corporation.  Ilis  analysis 
of  his  findings  is  particularly  pertinent  at  this  time  and  desen-es  to 
be  quoted: 

That  a  reduced  wage  scale  id  not  an  indispensable  preliminaiy  to  resumption  of 
acti\itie3  in  the  building  trades  is  the  opinion  of  Mr.  Morton  Chase  Tuttle,  who  has 
just  returned  to  Boston,  after  more  than  a  year  of  service  as  production  manager  for 
the  United  States  Emergency  Fleet  Corporation.  Mr.  Tuttle  leases  his  judgment  on 
recent  investigations  of  large  construction  entei-prises  from  New  England  to  Florida, 
supplemented  by  studies  carried  out  under  his  direction  by  a  construction  company 
in  Boston,  of  which  he  is  general  manager.  This  indicated  that  increased  efficiency 
of  labor  is  bringing  down  costs  even  while  wages  remain  at  existing  altitudes. 

"In  the  course  of  vievving  numerous  undertakings  more  or  less  closely  associated 
with  the  interests  of  the  Goverameut,"  says  Mr.  Tuttle, ' '  I  have  l)een  lately  impressed 
to  find  the  statement  commonly  made  that  cost  of  operation  was  beginning  to  show  a 
noticeable  decline.  And  this  almost  without  exception  was  attributed  to  increased 
efficiency  of  the  labor  force,  due  in  part  to  the  opportunity  for  weeding  out  the  lesa 
dependable  workers,  in  part  to  the  growing  desire  of  all  members  of  the  force  to  retain 
their*  jobs. 

''Cost  studies. — Owing  to  inadequate  or  otherwise  unsatisfactory  cost  studies  main- 
tained in  connection  \vith  most  of  these  undertakings,  I  found  it  impossible  fully  to 
check  the  statement  by  actual  figures.  Accordingly,  I  asked  my  own  company  to 
make  out  the  costs  of  any  one  process  in  an  operation  continued  over  a  period  of  several 
weeks.  That  which  was  selected  was  a  jnoce  of  concrete  work.  The  costs  studied 
were  those  for  the  common  labor  employed  on  this  work  from  January  7  to  February 


ECONOMICS   OF   THE   CONSTRUCTION   INDUSTRY.  189 

4  of  the  prt^ent  year  (1919),  inclusive.  During  thiy  peri'xlthe  wage  scale  remained 
unaltered,  but  the  personnel  of  the  lal)ur  force  underwent  fre(]uent  changes. 

"A  graph  of  the  lal)or  cost  of  the  work  during  the  period  noted  shows  a  sharp  and 
almost  unde\'iating  declin<}  from  day  to  day.  On  February  4  these  costs  were  exactly 
30  per  cent  less  per  unit  than  were  those  of  January  7.  It  is  my  l^elief  that  the  expe- 
rience of  my  company  is  by  no  means  isolated,  and  that  in  almost  any  labor  force  there 
lies  the  opportunity  of  realizing  economies  ranging  from  20  to  50  per  cent  without 
interfering  with  the  wage  scale. 

'^  Potent  Jar.tor. — This  implies,  ot  course,  that  there  is  now  increased  opportunity 
for  selecting  men  according  to  their  suitability  for  a  given  task  and  an  increased 
eagerness  on  the  part  of  the  men  to  make  good.  The  whole  country  ought  soon  to 
feel  the  effect  of  it  in  general  improvement.  It  is  a  case  of  supplanting  so-called 
liquidation  of  la])or  by  proper  adaptation  of  labor  as  a  means  of  keeping  the  cost  of 
doing  things  within  the  Ix/unds  of  utility. 

"State  of  mind  is  often  as  potent  a  factor  in  ultimate  labor  cost  as  is  the  rate  per 
hour.  Any  one  experienced  in  handling  workmen  has  recognized  the  difference  in 
output  between  a  cheerful,  capable  man,  anxious  to  hold  his  place,  and  one  who  is  a 
little  disgruntled  and  quite  conscious  that  he  can  get  another  job  the  mcmient  he 
drops  the  present  one.  Multiply  either  case  by  thousands  of  individual  instances, 
and  I  believe  that  there  will  be  found,  in  shifts  of  mental  attitude,  the  explanation 
of  much  of  the  variation  which  occurs  in  unit  cost.  And  this,  after  all,  is  the  element 
of  labor  which  directly  affects  the  profits  of  the  employer." 

Conclusions:  In  the  light  of  Mr.  Tuttle's  conclusions,  which  are 
borne  out  by  the  experience  of  the  Housing  Corporation  and  by  other 
governmental  builders,  as  well  as  by  private  builders,  it  ma}'  ])e  said 
that  the  efficiency  of  labor  for  1919  will,  other  factors  remaining  the 
same,  tend  toward  that  of  labor  in  its  normal  years. 


190 


ECONOMICS   OF   THl':   COXSTRUCTIOX   INDUSTRY. 


Tahi.e  81. — Arerafie  vtelhi  cnniinrm  in  Nev:  York  Stale  fadnrics. 
[Includes  all  cmployeos  in  both  oflBce  and  shop.] 


Industry. 


Stone,  clay,  and  plass  products 

Miscellaneous  stone  and  mineral  products 

Lime,  cement,  and  plaster 

lirick,  tile,  and  pottery 

Glass 

Metals,  machinery,  and  conveyances 

Gold,  silver,  and  precious  stones 

Brass,  copper,  aluminum,  etc 

Pig  iron  and  ri)llini;-mill  j)roduets 

Structural  and  ardiitcctural  iron  work 

Sheet-metal  work  and  hardware 

Firearms,  tools,  and  futlcry 

Cooking,  heating,  and  vruiilating  apparatus 

Machinery,  including  electrical  apparatus 

Automobiles,  carriages,  and  aeroplanes 

Cars,  locomotives,  and  railway  repair  shops 

Boat  and  slup  Imilding 

Instruments  and  appliances 

Wood  manu fact ures 

Sawmill  and  planing-mill  products 

Furniture  and  cabinetwork 

Pianos,  organs,  and  other  musical  instruments.. 

Miscellaneous  wood  and  allied  products 

Furs,  leather,  and  rubber  goods 

Leather 

Furs  and  fur  goods 

Boots  and  shoes 

Miscellaneous  leather  and  canvas  goods 

Rubber  and  gutta-percha  goods 

Pearl,  horn,  bone,  celluloid,  hair,  etc 

Chemicals,  oils,  paints,  etc 

Drugs  and  chemicals 

Paints,  dyes,  and  colors 

Animal  and  mineral  oil  products 

Miscellaneous  chemical  products 

Paper 

Printing  and  paper  goods 

Paper  boxes  and  tubes 

Miscellaneous  paper  goods 

Printing  and  lx)ok  making 

Textiles 

Silk  and  silk  goods 

Wool  manufactures 

Cotton  goods 

Cotton  and  woolen  hosiery  and  knit  goods 

Other  textiles  and  allied  products 

Clothing,  millinery,  laundering,  etc 

Men's  clothing 

Men's  shirts  and  furnishings 

Women's  clothing 

Women's  underwear  and  furnishings 

Women's  headwear 

Miscellaneous  sewing 

Laundering,  cleaning,  dyeing,  etc 

Food,  liquors,  and  tobacco. ." 

Flour,  feed,  and  other  cereal  products 

Fruit,  and  vegetable  canning  and  preserving 

(Jroceries  not  elsewhere  classified 

Slaughtering,  meat  packing,  and  dairy  products 

Bread  and  other  bakery  products 

Conlectionery  and  ice  cream 

Be\'er,ages  . . ". 

Cigars  and  other  tobacco  products 

Water,  light,  and  power 

General  average 


$2.5.30 

$13.94 

2ti.  3.5 

18. 47 

27.32 

13.38 

2LSI 

11.72 

25.27 

14.23 

27.39 

14.24 

20.  .52 

14.21 

2.5. 4.5 

12.73 

37.97 

10.03 

30.21 

15. 31 

22.44 

12.  20 

24.11 

13.11 

27.17 

13.87 

25.32 

13.96 

20.55 

18.07 

34.07 

14.34 

32.01 

10.16 

21.25 

13.40 

20.97 

12.50 

21.1! 

12.00 

20.91 

12.73 

22.  53 

14.29 

19.  .52 

10.81 

22.19 

11.88 

22. 57 

11.04 

29.  SO 

14.33 

23. 40 

12.52 

18.55 

10.99 

19.91 

10. 93 

17.80 

9.02 

21.81 

13.64 

19.97 

14.57 

21 .  00 

14.13 

22.91 

13.35 

21.89 

13.17 

25.05 

13.49 

22.09 

15.10 

17.02 

10.59 

18.38 

11.75 

24.00 

17.03 

17.21 

9.47 

15.50 

9.20 

17. 01 

9.89 

19.44 

9.61 

10.26 

8.98 

18.93 

10.20 

10. 45 

10.00 

18.77 

11.02 

13.13 

8.51 

20. 10 

12.02 

14.43 

8.18 

19.18 

10.92 

12. 89 

8.30 

14.90 

8.86 

20.25 

11.72 

24.71 

15.10 

17.54 

9.62 

21.92 

13.20 

26.41 

14.88 

21.48 

11.19 

14.94 

9.W 

27.19 

18.58 

16.30 

8.96 

26.89 

15.48 

23.13 


12.56 


ECONOMICS  OF   THE   C'OXSTRUCTIOiS'   INDUSTRY. 


191 


Table  82. — Arewie  anmml  union  ucKie  scales,  hvildinn  trades,  oii  per  hovr  ftn.'Jw, 

191S-191S.  inclusive. 


[All  figures  as  of  May  15  of  each  year  in  a  minimum  of  10  cities  in  all  parts  of  the  United  States.    C'ompiled 
by  L.  F.  Summerall,  statistician,  Ordnance  Salvage  Board,  AVar  Department.] 


Building  trades. 

1913 

1914 

1915 

1916 

1917 

ms 

Bricklayers 

$0. 6647 
.3104 
.  5040 
.5706 
.3955 
.3785 

$0. 6759 
.3125 
.5104 
.5736 
.3983 
.3785 

80.6590 
..3512 
.5070 
.4165 
.3362 
.4000 
.3573 
.2865 
.5750 
.3363 
.  .50.50 
.5580 
.46.57 
.6582 
.3935 
.5628 
.4341 
.  5781 
.3076 
.6267 
.  6145 
.6216 
.3753 

SO. 7005 
.3.579 
.5406 
.  6039 
.4291 
.3982 
.4818 
.3730 
.6128 
.  3863 
.  5553 
..58S1 
.4963 
.  6867 
.4.321 
.6170 
.  4554 
.6117 
.  3286 
.  6653 
.6260 
.63.54 
.3984 

.$0. 7303 
.3700 
.  5707 
.6436 
.5187 
.4376 
.5083 
.  3938 
.6512 
.4265 
.5765 
.6298 
.5321 
.7169 
.4674 
.  6431 
.4946 
.6428 
.  3.548 
.  7033 
.  6574 
.6599 
.  41.38 

*0. 80.52 

Building  laborers. .. .           

.  t'O-.t 

.6700 

Cement  finishers 

.7381 

Cement  finishers'  helpers 

.02.5<» 

.5600 

Composition  roofers . . 

.620-1 

Composition  roofers' helpers .  .. 

.  4!)2i> 

.6023 
.3571 
.5136 
.  5653 
.4744 
.6581 
.41.50 
.5992 
.4616 
.  5955 
.3003 
.  6069 
.  5972 
.5994 
.3952 

.6101 
.3663 
.5281 
.  5793 
.4761 
.6678 
.4256 
.6055 
.4719 
.6034 
.3104 
.6198 
.6103 
.6175 
.4005 

.7082 

Hod  carriers 

.  5319 

Inside  wiremea . .           

.71H 

Latlicrs 

.7129 

.6289 

.8023 

Plasterers'  laborers      

.  5527 

.7645 

Sheet-metal  workers 

.66tj7 

Steam  fitters .              

.  7M7 

Steam  fitters'  helpers 

.4326 

.7768 

Structural-iron  workers 

.7858 

.7879 

Structiu-al-iron  workers:  Finishers'  helpers 

.5215 

Annual  average  all  above  trades 

.5030 

.5115 

.4750 

.  5208 

.5540 

.6584 

Sources:  U.  S.  Department  of  Labor  and  American  Federation  of  Labor. 

Note. — The  introduction  in  1915  of  the  wage  scales  of  the  composition  roofers  and  helj^i-s  lowers  the 
averages  for  1915-1918  slightly. 

Table  83. — Percentage  increase  in  hourly  wage  rate  for  building    tradesmen  in  hrge 
American  cities,  1914-191S. 

ATLANTA,  GA. 

[Average  increase,  47.4  per  c«nt.] 


Hourly  rate. 

Trades. 

Hourly  rate. 

Trades. 

1914 

1918 

Per 
cent 
in- 
crease, i 

1914 

1918 

Per 
cent 
in- 
crease. 

Cmls. 
45.0 
20.0 
40.0 

62.5 
45.0 
28.1 

Cents. 
70.0 

55 

Painters 

Cents. 

45.0 
44.4 
33.3 
44.4 
45.0 
62.5 

62.5 

Cents. 
50.0 

.50 

Plasterer? 

Carpenters 

Engineers     (portable    and 
hoisting): 

60.0 

62.5 
62.5 

50 
39 

Plumbers  and  gas  fitters.... 

Sheet-metal  workers 

Steam  fitters.           

68.8 
65.0 
68.8 
70.0 
75.0 

55 
95 

55 

Stoncma.'5ons 

55 

Hoist 

Stmctmal-irou  workers 

Structural-iron  workers  (fin- 
ishei's)           

20 

55  0 

Marble  .setters 

68.8 

70.0 

' 

! 

BALTIMORE,  MD. 
[Average  increase,  49  per  cent.] 


Bricklayers 

Building  laborers !    20. 

Carpenters 

Engineers     (portable    and 
hoisting):  Boom  derrick. . . 

Hod  carriers 

Inside  wiremen 

Marble  setters 

Painters 

Plasterers 


62.5 

100.0 

GO 

20.0 

43.8 

70.0 

60 

62.5 

80.0 

28 

31.3 

56.3 

80 

4:^.8 

70.0 

60 

62.5 

75.0 

20 

37.5 

68.8 

S3 

62.5 

75.0 

20 

1^ 

Pliuul)crs  and  ga.-^  fitters... 

Sheet-metal  worker? 

Steam  fitters 

Steam  fitters'  helpers 

Stonemasons 

Structural-iron  workers 

Structural-iron  workers  (fin 

isiiersi 

Tili<  lavoi 


50.0 

7.5.0 

40.0 

62.5 

50.0 

68.8 

28.1 

43.8 

56.3 

75.0 

56.3 

87.5 

56. 3 

87. 5 

50.0 

1 

65.0 

192 


ECONOMICS   OF   THE   CONSTRUCTION   INDUSTRY. 


Taui.k  83. — Pcrccntuf/e  increase  in  hourly  vaye  rale  for   buildiny    tradesmen   in   larye 
American  cities,  19 14- WIS — Continued. 

BIRMINGHAM,  ALA. 
[Average  increase,  2C.7  per  cent.) 


Hourly  r; 

l,t.C. 

Trades. 

Hourly  rate. 

Trades. 

1014 

1918 

Per 
cent 
in- 
crease. 

1914 

1918 

Per 
cent 

in- 
crease. 

Bricklayers 

Cents. 
70.0 
45.0 
50.0 

62.5 
56.3 
30.0 
62.5 

Cents. 

65.0 
75.0 

70.0 
62.5 
37.5 
75.0 
87. 5 
62.5 

25 
44 
50 

12 
11 
25 
20 

39 

Painters  (sign) 

Cents. 
.56.3 
62.5 
30.0 
68.8 
5.5.0 
6.8.8 
70.0 
62. 5 

Cents. 
75.0 
7.5.0 
37.5 
87.5 
6.5.0 
87.5 
87.5 

33 

Plasterers 

25 

Cement  workers  (finishers). . 
Eusinecrs     (portable     and 
hoisting): 
Boom  derrick 

Plasterers' laborers 

Plumbers  and  gas  fitters 

Sheet-metal  workers 

23 
27 
18 

Steam  fitters 

27 

Hoist 

25 

Structural-uon  workers 

Structural-iron  workers  (fin- 
ishers)  

Alavi)lc  setters 

45.0 

BOSTON,  MASS. 
[Average  increase,  29.2  per  cent.] 


Bricklayers 

Building  laljorers 

Carpenters 

Cement   workers   (finishers) 
Engineers     (portable     and 

hoisting) 

Hod   carriers 

Inside  wircmen 

M  urble  setters 

Marble  setters'   helpers 

Painters 

Painters  (sign) 


65.0 

80.0 

23! 

35.0 

40.0 

14 

55.0 

75.0 

36 

62.5 

75.0 

20 

62.5 

75.0 

20 

35.0 

42.5 

21 

55.0 

70.0 

27 

56.3 

75.0 

33 

30.0 

42.5 

42 

5.5.0 

7.5.0 

36 

62.5 

68.8 

10 

Plasterers 

Plasterers'  laborers 

Plumbers  and  gas  fitters 

Sheet-metal  workers 

Steam  fitters 

Steam  fitters'  helpers 

Stonemasons 

Structural-iron  workers .... 
Structural-iron  workers  (fin- 
ishers)  

Tile  layers 

Tile  layers'  helpers 


6.5.0 

80.0 

40.0 

60.0 

65.0 

75.0 

55.0 

70.0 

50.0 

75.0 

28.1 

50.0 

6-5.0 

80.0 

62.5 

80.0 

62.5 

80.0 

68.8 

80.0 

43.8 

BUFFALO,  N.  Y. 
[Average  increase,  26  per  cent.] 


Bricklayers 

Building  laborers 

Carpenters 

Cement  workers  (finishers).. 
Engineers     (portable    and 

hoisting) 

Inside  wiremen 

Marljlc  setters 

Pamters 

Painters  (sign) 


65.0 


56.3 
47.5 
62.5 
46.9 


75.0 
45.0 
70.0 
65.0 

68. 8 
70.0 
75.0 
56.3 
75.0 


Plasterers 

Plumbers  and  gas  fitters . . . 

Sheet-metal  workers 

Steam  fitters 

Steam  fitters'  helpers 

Stonemasons 

Structural-iron  workers 

Stnictmal-iron  workers  (fin- 
ishers)   

Tile  lavers 


60.0 

70.0 

56.3 

68. 8 

50.0 

62.5 

56.3 

68.8 

34.4 
75.0 

6.5.0 

62.5 

85.0 

62. 5 

8.5.0 

56.3 

62.5 

CHARLESTON.  S.  C. 
[-Vverage  increase,  47.4  per  cent. 


40.0 
33.3 
33.3 
25.0 

50.6 
50.0 
67.0 
31.3 

25 
50 
71 
25 

50.0 
40.0 
43.8 
43.8 

Plasterers 

50.6 
73.0 
73.0 

26 

1  nside  wiremen 

Plumbers  and  gas  fitters 

Steam  fitters 

67 

67 

ECONOMICS    OF   THE    COXSTRUCTIOX    IXDUSTRY. 


193 


Table  8.3. — Pnccntage  increase  in  hourhj   vagc  rate  for  building   Iradesincn  in   large 
American  cities,  1914-1918 — (,'ontinued. 

CHICAGO^  ILL. 
[Average  increase,  13.6  per  cent.] 


Hourly  rate. 

Trades. 

Hourly  rate. 

Trades. 

1914 

1918 

Per 
cent 
in- 
crease. 

1914 

1918 

Per 

cent 
in- 
crease. 

Bricklayers 

Cents. 
7.5.0 
57. 5 
G5.0 
65.0 

7.5.0 
40.0 
75.0 
71.9 
42.  5 
70.0 
75. 0 

Cents. 
81.3 
70.0 
80.0 
75.0 

87.5 
50.0 
81.3 
75.0 
50.0 
75.  0 
81.3 

8 
22 
23 
15 

17 
25 

8 
4 

18 

8 

Plasterers . 

Cent,. 
7.5.0 
50.0 
7.5.0 
68.  S 
75. 0 
40.0 
7.5.0 
68.0 

Cents. 

87.  5 
56.3 
81.3 
75.0 
8.5.0 
45.0 
81.3 
87.5 

80.0 
81.3 
50.0 

17 
13 

Building  laborers 

Carpenters 

Plumbers  and  gas  fitters 

Sheet-metalworkers 

Cement  workers  (finishers) . . 

9 

Engineers    (portable    and 

Steam  fitters 

13 

hoisting) 

Steam  fitters'  helpers 

Stonemasons 

Hod  carriers 

}j 

Inside  wiremen 

Structural-iron  workers 

Structural-iron  v.-orkers' 
helpers 

29 

Marble  setters. 

Marble  setters'  helpers 

Painters 

Tile  layers 

7.5.0 
43.8 

g 

Painters  (sign) 

Tile  layers'  helpers 

14 

CINCINNATI.  OHIO. 

[Average  increase,  20.2  per  cent .] 


Bricklayers 

Building  laborers 

Carpenters 

Cement  workers  (fliiishers) . 
Engineers    (portable    and 

hoisting) 

Hod  carriers 

Inside  wiremen 

Marble  setters 

Marble  setters'  helpers 

Painters 

Painters  (sign) 


65. 0 

90.0 

3S! 

2.5.0 

3.5.0 

40 

50.0 

65. 0 

30 

50.0 

75.0 

50 

55.6 

60.0 

8 

42.5 

50.0 

18 

50.0 

68.8 

38 

68.8 

75.0 

9 

31.3 

37.5 

19 

50.0 

60.0 

20 

59.4 

6.5.6 

10 

Plasterers 

Plasterers'  laborers 

Plumbers  and  gas  fitters 

Sheet-metal  workers 

Steam  fitters 

Steam  fitters' helpers 

Stonemasons 

Structural-iron  workers 

Structural-iron  workers 

(finishers) 

Tile  layers 

Tile  layers'  helpers 


75.0 

75. 0 

45.0 

50.0 

61.  S 

6.5.6 

4.5.0 

52.5 

60.0 

65.  5 

33. 5 
70.0 

60.0 

62.5 

75.0 

56.3 

7.5.0 

62. 5 

71.9 

32.5 

37.5 

CLEVELAND,  OHIO. 
[Average  increase,  38.6  per  cent. 


Bricklayers 

Building  laborers 

f  "arpenters 

Cement  workers  (finishers). . 
Engineers  (portable  and 
hoisting): 

Boom  derrick 

Hoist 

Hod  carriers 

1  uside  wiremen 

Marble  setters 

Marble  setters'  helpers 

Painters 


70.0 

90.0 

29 

5.5.0 
80.0 

4.5 

5.5.0 

55.0 

80.0 

45 

70.0 

90.0 

29 

60.0 

8.5.0 

42 

32.5 

55.0 

69 

60.0 

81.3 

36 

62.5 

7.5.0 

20 

37. 5 
50.0 

67.5 

35   1 

Painters  (sign) 

Plasterers 

Plasterers'  laborers 

Plumbers  and  gas  fitters 

Sheet-metal  workers 

Steam  fitters 

Steam  fitters' helpers 

Stonemasons 

Structural-iron  workers 

Structural-iron  workers 

(finishers) 

Tile  layers 

Tile  layers'  helpers 


75.0 
87.5 

62.  5 

3.5.0 

5.5.0 

62.  5 

90.0 

45.0 

80.0 

62.  5 

81.3 

31.3 

43.8 

70.0 

90.0 

70.0 

90.0 

70.0 

90.0 

59.4 

7.5.0 

31.3 

37.5 

DALLAS,  TEX. 

[.Average  increase,  21.0  per  cent .] 


Bricklayers 

Carpenters 

Cement  workers  (finishers) . 
Engineers     (portable    and 

hoisting) 

Inside  wiremen 

Marble  setters 

Painters 

Painters  (sign) 

Plasterers 


87.5 

87.5 

i 
1 

5.5.0 

80.0 

45 

62.5 

75.0 

20 

62.  5 

87.  5 

40 

56.3 

87.5 

55 

68.8 

68.  S 

50.0 

70.0 

40 

62.5 

7.5.0 

20 

87.5 

100.0 

14 

Plasterers'  laV)orers •. . 

I'lumbers  and  gas  fitters 

Slicct-metal  workers 

Steam  fitters 

Steam  fitters'  helpers 

Stonem;i.sons 

Structural-iron  workers 

Structural-iron  workers 

(finishers) 

Tile  layers 


35. 0 
75. 0 
56.3 
7.5.0 


87.: 

■62.; 


100.0 
7.5.0 

100.0 
50.0 
87. 5 


7.5.0 
75.0 


121297' 


-19- 


-13 


194 


ECONOMICS    OF  THE   CONSTRUCTION    [NDUSTRY. 


T\Bi.i-:  S3. — Pprn'utnge  increase  in    hourly   vuge  rate  for  hnnUUmi  frnr1,:^,i>en  in  Wrtje 
Amerirnn  cities,  19't4-l'*iK — Continiuvi. 

DKNVER.  COLO. 
[Avemge  inoreasc,  32.9  per  c«it.) 


Trades 


BricVlayers 

Biiikling  laborers 

Carpenters 

Cement  workers  (finishers) . 
En(,'ineers     (portable    and 

hoistins) 

Hod  carriers 

Inside  wiremen 

Marlde  setters 

Marble  setters'  helpers 

Painters 

Painters  (sign) 


Hourly  rate. 


Cents. 
75. 0 

"jo.'o' 

62.  j 

62.0 
40.6 
56.3 
68.8 
37.5 
50.0 
62.5 


Cents. 

100.0 
.53.1 
75.0 
7.5.0 

81.3 
56.3 
82.5 
75.0 


68. 


Per 
cent 
in- 
crease. 


Trades. 


Plasterers 

Plasterers'  laborers 

Pliimliers  and  gas  fitters. 

Sheet -metal  workers 

>Sicuni  fitters 

Steam  fitters' helpers 

Stonemasons 

Structural-iron  workers. . 
fcjtructural-iroa  workers 

(finishers) 

Tile  layers 

Tile  layers'  helpers 


Hourly  rate. 


191S 


Per 
cent 
in- 
crease. 


Cents. 

Cents. 

7.-.  0 

87.5 

43.  S 

.59.4 

62.  5 

87.5 

56.3 

75.0 

62. .'. 

87.5 

31.3 

43.  >. 

62.  5 

K7. 5 

56.3 

75.0 

56.3 

7.5.0 

62.  5 

7.5.0 

34.4 

43.8 

DETROIT,  MICH. 
[Average  increase,  36.9  per  cent.] 


Bricklayers 

Carpenters 

Cement  workers  (finishers). . 
Engineers  (fwrtable  and 
hoisting): 

Boom  derrick 

Hoist 

Hod  carriers 

Inside  wiremen 

Marble  setters 

Marble  setters'  helpers 

Painters 

Painters  (sign) 


65.0 
50.0 
50.0 


65.0 
62.5 
3.5. 0 
50.0 
62.5 
34.4 
45.0 
50.0 


80.0 
70.0 
70.0 


100.0 
75.0 
56.3 
75.0 
75.0 


70.0 
75.0 


50 


Plasterers 

Plasterers'  laborers 

Plumbers  and  .cas  fitters 

Sheet-metal  workers 

Steam  fitters 

Steam  fitters'  helpers 

Stonemasons 

Structural-iron  workers 

Structural-irou  workers 

(finishers) 

Tile  layers 

Tile  layers'  helpers 


6^..<« 

75.  0 

•■) 

43.0 

50.0 

16 

56.3 

75.0 

33 

50.0 

70.0 

40 

56.  .3 

75.0 

33 

2."..  0 

4.5.0 

SO 

6.-,.  0 

SO.O 

K 

6.5.0 

80.0 

23 

6.5.0 

80.0 

23 

.50.0 

71.9 

44 

25. 0 



FALL  RIVER,  MASS. 
[Average  increase,  40.7  per  ceni .] 


Biickla.yers 

Carpenters 

Cement  workers  (finishers). 

Inside  wiremen 

Painters 

Plasterers  


60.0 
42.0 


37.  5 
37.5 
60.0 


7.5.0 
62.5 
75.0 
60.0 
55.0 
75.0 


Plumbers  and  ga^;  fit ters . . 

S  t  earn  fl  1 1  e  rs 

Steam  fitters'  helpers 

S  t  tmemasons 60.  o 

Stmctiu-al-ii-on  workers . . 


67.5 
60.0 
4.5.0 
75.0 
62.5 


INDIANAPOLIS.  IND. 
[Average  increase,  16.1  percent.] 


Bricklayers 

Carpenters 

Cement  workers  (fuushers). 
Engineers     (portable     and 

hoisting) •. . 

Hod  carriers 

Insidi'  wiremen 

iMurblo  setters 

Painters 

Painters  (sign) , 

Plasterers 


85.0 
60.0 
62.5 

72.5 
50.0 
67.5 
75.0 
55.0 
62.5 
75.0 


Plasterers  laborers 

Plumbers  and  gas  fit  ters 

Sheet -metal  workers 

Steam  fitters 

Steam  fittei"?'  helpers 

Stonemasons 

St ruci  iiral-iron  workers 

St ruct  ui-al-iron  workers  ( ftn- 

isherst , 

Tile  layers 

Tile  laVers'  helwi-s 


62.0 
50.0 
62.5 


70.  o 
63.0 

68.0 
62.  5 
31.3 


50.0 
75.  0 
60.0 
75.0 
37.  5 
8.5.0 
75.0 

75.0 

6!*.  << 


ECONOMICS   OF   THE   C02>rSTRUCTIOX   INDUSTRY. 


195 


Table  83. — Percentage  increase  in  hourly  ivage  rale  for  biiildinij   tradesmen   in   largf 
American  cities,  1914-1918 — Continued. 

JACKSONVILLE,   FLA. 
[Average  increase,  40.3  per  cent.] 


Hourly  rate. 

Trades. 

Hourly  rate. 

Trades. 

1914 

Per 
1918       <=fnt 

crease. 

1 

1914 

1918 

Per 
cent" 
in- 
crease. 

CenU. 
62. .") 
37.5 
45. « 
37.5 
62.5 

Cents. 
75.  0 
55.  0 
75. 0 
55.0 
75.0 

10 
47 
67 
47 
20 

Plumbers  and  gas  filters.  . . . 

Sheet-metal  workers 

Steam  fitters 

Cents. 
62.5 
37.5 
62. 5 
62.  5 

Cents. 
75. 0 
68. 0 
75. 0 

20 

Carpenters 

81 
20 

KANSAS  CITY,  MO. 
[.Vverage  increase,  21.1  per  ceni.] 


Bricklaj'ers 

Building  laborers 

Carpenters 

Cement  workers  ( finishers). 
Engineers     (portable    and 

hoisting) 

Hod  carriers 

Inside  wiremen 

Marble  setters 

Marble  setters'  helpers 

Painters 

Painters  (sign) 


7.5.0 

87.5 

17 

30.0 

47.  5 

58 

60.0 

75.  0 

25 

65.0 

75.0 

15 

70.0 

81.3 

16 

37.5 

55. 0 

47 

62.5 

75. 0 

20 

6S.  8 

75.0 

9 

37.5 

60.0 

75.0 

25 

70.0 

81.3 

16 

Plasterers 

Plasterers  laborers 

Plumbers  and  gas  fitters . . . 

Sheet -metal  workers 

Steam  fitters 

Steam  fitters'  helpers 

Stonemasons 

Structural-iron  workers 

Stnictmal-iron  workers  (fin- 
ishers)   

Tile  layers 

Tile  layers'  helpers 


75. 0 
45. 0 
68.8 
60.0 

68.8 


62. 


65.0 
75. 0 


at..-) 
.55. 0 
87.5 
67.5 
87.5 
43.8 
75. 0 
75. 0 

75.0 
7.5. 0 
43.8 


LITTLE  ROCK,  ARK. 
[Average  increase,  33.5  per  cent.] 


Bricklayers 

Building  laborers 

Carpenters 

Cement  workers  (finishers).. 
Engineers     (portable     and 

hoisting) 

Hod  carriers 

Inside  wiremen 


7.5.0 


50.0 
55.6 

50.0 
37.  5 
50.0 


35.0 
70.0 
75.0 

50.0 
.55. 0 
75.0 


Painters 

Plasterers  

I'lumbers  and  gas  fitter.s . 

Sheet-melal  workers 

Sleam  fitters 

Stonemasons 

Tile  layers 


50.0 

65.0 

62. 5 

75.0 

62.5 

87.  5 

52.  5 

75. 0 

62.  5 

.87.  5 

62.  5 

87.  5 

75.(1 

LOS  ANOELES,  CAL. 
[Average  increase,  17.4  per  ceni .] 


Bricklayers 

Building  laborers 

Car])enters 

Engineers     (portable    and 

hoist  iug) 

Hod  carriers 

Inside  wiremen 

Marble  setters 

Marble  setters'  helpers 

Painters 

Painters  (sign ) 


7.5.0 
34.4 
50.0 

50.0 
40.  (i 
50.0 
68.8 
37.5 
43.8 
62.  5 


75.0 
43.  8 
62.5 

62.  5 
50.  0 
62.  5 


62.  5 

68.  S 


Plasterers 

Plasterers  laborers 

Plumbers  and  gas  fitters 

Sheet-metal  workers 

Sleam  fitters 

Stoneiiiasons 

Structural-iron  workers 

Structural-iron  workers  din 

ishers) 

Tile  layers 

Tile  layers'  helpers 


75. 0 
61.4 
56.  3 
56.  3 
5P.3 
62.  5 
50.0 

50.0 
62.  5 
34.4 


75.0 
62.  5 
68.8 
68.8 
68.8 


196 


ECONOMICS   OF   THE    CONSTRUCTION    INDUSTRY. 


TArn;E  83. — Pirccntuxje,  increasr   in,   honrh/   irar/f   rate  for  buildiutj  trnflmtnen  in  large 
Amcru-fiv  cities,  191-ft-li)18 — Continued. 

T.OUrSVILI-E,  KY. 

(Average  inci'easo,  27.8  j)or  cent.) 


Hourly  rate. 

Trades. 

Hourly  rate. 

Trades. 

1914 

l'.)18 

Per 

rent 
in- 
crease. 

1914 

1918 

Per 

cent 

in- 

creajjc. 

Bricklayers 

Building  laborers 

Engincors     (portable    and 

hoistiiif,') 

Hod  carriers 

CenU. 
6.^>.  0 
27.9 

.SO.  3 
as.  0 
40.0 

CenU. 
7.5.0 
30.0 

75.0 
50.0 
60.0 
6S.  X 
60.0 
62.5 
70.0 

15 

8 

32 
.50 

25 

8 

Plasterers' laljorcrs 

Phimbers  and  gas  fitters 

Sheet-metal  workers 

Steam  fitters 

Steam  fitters'  helpers 

Stonemasons 

CenU. 
38.0 
60.0 
42.  5 
.50.0 
2.5.0 
60.0 
50.0 

CenU. 
.50.0 
70.0 
50.0 
75. 0 
37.5 
70.0 
70.0 

75. 0 
75.0 

32 
17 
18 
.50 
.50 
17 

Marble  setters 

Structural-iron  workers 

Structural-iron  workers  (fin- 

40 

Painters 

Painters  (sign) 

.50.  0 
.50.0 
65.0 

Tile  layers 

50.0 

50 

MANCHESTER,  N.  H. 
Average  increase,  64.5  per  cent.] 


Bricklayers 

60.0 
40.0 

"34.'4' 
31.3 

75.  0 
60.0 
7.5.0 
60.0 
50.0 

25 

50 

74 

60 

Plasterers 

Plumbers  and  sjas  fitters 

Slieet-metal  workers 

Steam  fitters 

.50.0 
31.3 
34.4 
31.3 

75.0 
70.0 
37.5 
70.0 

.50 

Carpenters 

Cement  workers  (finishers). . 

124 

9 

124 

Painters 

MEMPHIS,  TENN. 
[Average  increase,  26.9  per  cent.] 


7.5.0 
50.0 

6.5.0 
30.0 
50.0 
52.5 
51.9 

87  5 
65.0 

6.5.0 
50.0 
75.0 
62.5 
62.5 

17 
30 

67 

50 
19 
20 

Pla.st^rer.s 

75.  0 
62.5 
50.0 
62.5 
31.3 
65.0 
62.  5 

87.5 
81.3 
62.5 
81.3 
40.6 
75.0 

17 

Plumbers  and  gas  fitters 

Sheet-metal  workers 

Steam  fitters 

30 

Engineers     (portable    and 

25 
30 

Hod  carriers 

Steam  fitters'  helpers 

Structural-iron  workers 

Tile  layers 

30 

13 

Painters 

MILWAUKEE,  WIS. 
[-\verage  increase,  21.7  per  cent.] 


Bricklayers 

Carpenters 

Cement  workers  (finishers). 
Engineers     (portable    and 

hoisting) 

Hod  carriers 

Inside  wiremen 

Marble  set  tors 

M;ul>le setters'  helpers 

Painters 

Painters  (sign) 


67.5 

75. 0 

1 
11  i 

50. 0 

62.  5 

25 

45.0 

65.0 

44 

62.5 

80.0 

28 

35.0 

50.0 

43 

50.0 

75.0 

50 

68.8 

75.0 

9 

37.5 
55.  0 

60.0 

9 

62.5 

68.8 

10 

Plasterers'  helpers 

Phunbers  and  gas  fitters . . . 

Sheet-metal  workers 

Steam  fitters 

Steam  fitters'  helpers 

Stonemasons 

Structural-iron  workers 

Structural -iron      workers 

helpers 

Tile  layers 

Tile  layers'  helpers 


35.0 

50.0 

62.  5 

6S.S 

45.0 

60.0 

56.3 

62.5 

28.1 

31.3 

67.5 

7.5.0 

62.5 

70.0 

62.5 

70.0 

62.5 

71.9 

34.4 

43.8 

ECONOMICS   OF   THE    CONSTRUCTIOX    INDUSTRY. 


197 


Table  83. — rrrcentage  increase  in  hourly   vaf/e  rate  for  buildiny   tradesnun   in  large 
American  cities,  1914-1918 — Continued. 

MINNEAPOLIS,  MINN. 
[Average  increase,  20.5  per  ceut.) 


Hourly  rate. 

Trades. 

Hourly  rate. 

Trades. 

1914 

1918 

Per 

cent 
in- 
crease. 

! 

1914 

1918 

Per 
cent 
in- 
crease. 

Bricklayers 

Cents. 
70.0 
50.0 
50.0 

50.0 
50.0 
62.  5 
37.5 
50.0 
.56.3 
70.0 

Cents. 
75.  0 
60.0 
65.0 

65.0 

68.8 
71.9 

"'62.' .5' 
6.5.0 
75.  0 

7 
20 
30 

30 
38 
15 

2.5 

1.5 

Plasterers' laborers. .  . 

Cents.  , 
40.6 
62.  5 
50.0 
62.5 
31.3  1 
55.0  1 
62.5  1 
j 

62.5  1 
62.5  i 
31.3  j 

Cents. 
55.0 
75.0 
56.3 
7.5.0 
40.0 
70.0 
75.0 

7.5.0 
68.8 
37.5 

35 

Carpenters 

Plumbers  and  gas  fitters 

Sheet-metal  workers 

Steam  fitters. . 

20 

Cement  workers  (finishers). . 
Engineers     (portable    and 

13 
20 

hoisting) 

Steam  fitters'  helpers 

Stonemasons  .          ... 

28 

Inside  wiremen 

27 

Marble  setters.      .  . 

Structural-iron  workers 

Structural-ironworkers  (fln- 

20 

Marble  setters'  helpers 

Painters 

20 

Painters  (sign) 

Tfle  layers. . 

10 

Plasterers 

19 

NEWARK,  N.  J. 
Average  increase,  26.4  per  cent.] 


Bricklayers , 

Carpenters 

Cement  workers  (finishers) . 
Engineers     (portable    and 

hoisting) 

Hod  carriers 

Inside  wiremen 

Marble  setters , 

Marble  setters'  helpers 

Painters 

Plasterers 


65.  0 

80.0 

23 

50.0 

70.0 
70.0 

40 


69.3 

81.3 

17 

35.0 

50.0 

43 

62.5 

7.5.0 

20 

68. 8 

75.0 

9 

40.6 
44.0 

62.5 

42 

65. 0 

80.0 

23 

Plasterers'  laborers 

Plumbers  and  gas  fitters . . . 

Sheet-metal  workers 

Steam  fitters 

Steam  fitters'  helpers 

Stonemasons 

Structural-iron  workers. . . . 
St  rucl  ural-irou  workers  (fin- 
ishers)  

Tile  layers 

Tile  layers'  helpers 


62.5 
60.0 
62.5 
33.1 
65.0 
62.5 

62.  5 
62.5 


50.0 
75.0 
75.0 
75.0 
42.5 
.80.0 
87.5 

87.5 
6S.  8 
40.6 


NEAV   HAVEN,  CONN. 
[Average  increase,  26.4  per  cent.] 


60.0 
50.0 

70.0 
6.5.0 
70.0 

75.0 
6,0.0 
70.0 
53.1 

17 
30 

38 
30 

Plasterers 

60.0 
50.0 
47.7 

70.0 
62.6 
59.  i 
62.5 
70.0 
80.0 

80.0 

17 

Plumbers  and  gas  fitters 

Sheet-meta!  workers 

25 

24 

Engineers     (jjortable    and 

54.5 

Steam  fitters 

Stone  masQns 

55.0 
62.5 

62.5 

27 

Inside  wiremen 

Structural-iron  workers 

Structural-iron  workers  (fin- 
ishers)  

28 

Marble  setters 

40.9 

28 

Bricklayers 

Carpenters 

Cement  workers  (finishers) 
Engineers     (portable    and 

hoisting) , 

Inside  wiremen 

Marble  setters , 

Painters 

Plasterers , 


NEW  ORLEANS,  LA. 
[Average  increase,  26.0  per  cent.] 


62.5 
40.0 


50.0 
50.0 
62.5 
40.0 
62.5 


75.  0 
54.0 


65. 0 
70.0 
75. 0 
,50.0 
62.5 


Plasterers'  laborers 

Plumbers  and  gas  fitters. . , 

Slicot-mctal  workers 

Steam  fitters 

Stone  masons 

Structural-iron  workers 

Structural-iron  workers  (fin 
ishers) 


22.5 
56.3 
4p.O 
56.3 
62.5 
62.5 

62.5 


28.3 
68.8 
68.8 
75.  0 
62.5 
75.0 

75. 0 


198 


ECON^OMICS   OF   THE   CONSTRUCTION    INDUSTRY. 


Table  8:i. — f'erantii'je  increase  in  houiiy    uage  ruU  fm'  OitiUimj   tifuhHinen    in   larq* 
American  cities,  1914-1918 — Continued. 

NEW    YORK,   N.    V. 
lAverage  iucrease,  21.6  per  cent.] 


Hourly  rale. 

Trades. 

Tfourly  rate. 

Trades. 

1914 

1918 

Per 
cent 
in- 
crease. 

KM  4 

1018 

Per 
cent 
in- 
crease. 

Bricklayers 

Cents. 
75.0 
22.5 
62.5 
62.5 

62.5 
37.5 
60.0 
68.8 
40.6 
50.0 

Cents. 
81.3 
40.5 
68.8 
70.0 

81.1 
50.0 
75.0 
75.0 
43.8 
70.0 
75.0 

8 

80 
10 
12 

30 
33 
25 
9 
8 
40 

Plasterers 

68.8 

40.  e. 

68.8 
62.5 
68.8 
37.5 
60.0 
62.5 

62.5 
68.8 

CctUs. 
75.0 
56.3 
75.0 
70.0 
75.0 
42.5 
75.0 
87.5 

68.8 
75.0 
46.0 

9 

Building  laborers 

.; 

Cari>i'utcrs 

Plumbers  and  gas  fitters 

Sheet-metal  workers 

Steam  fitters 

Steam  fitters' helpers 

Stone  masons 

9 

Cement  workers  (finishers). . 

EnRiiieers    (portable    and 
hoisting):        Foundation 
work 

13 

,! 

25 

Hod  carriers 

Structural-iron  workers 

Structural-iron  workers  (fin- 
ishers)   

49 

Inside  wiremen 

Marble  setters 

19 

Marble  .setter's  helpers 

Painters 

Tile  la  vers 

9 

Tile  la  vers'  helpers 

Painters  (sign) 

OMAHA,  NEBR. 
[.■Vverage  increase,  24.5  per  cent.] 


70.0 

75.0 
50.0 
60.0 
75.0 

75.0 
55..0 
70.0 

68.8 
62.5 
7.5.0 

7 

20 

36 

33 

46 

25 

36 

Plasterers 

7-5.0 
6-S.3 
42.5 
68.3 

87.5 
87.5 
65.0 
87.5 
43.8 
75.0 
75.0 

75.0 
71.9 
40.0 

17 

Plumbers  and  gas  fitters 

Sheet-metalworkers 

2!J 

Carpenters 

50.0 
55.0 

.56.3 

53 

Cement  workers  (finishers). . 

Steam  fitters 

2S 

Engineers     (portable     and 
hoisting) 

Steam  fitfers'  helpers 

Stone  ma.sons 

70.0 
60.0 

60.0 

68.8 
37.5 

7 

Hod  carriers 

Structural-iron  workers 

Structiual-iron  workers  (fin- 
ishers ) 

25 

Inside  wiremen 

50.0 

Marble  setters 

25 

Painters 

50.0 
55.0 

Tile  layers 

s 

Painters  (sign) 

Tile  layers'  helt>ers 

7 

PHILADELPHIA.  PA. 
[Average  increase,  39.3  per  cent.] 


Bricklayers 

65.0 

80.0 
45.0 
70.0 
65.0 

75.0 
60.0 
75.0 
75.0 

23 

27 

37 

33 
71 

67 
9 

Plasterers 

62.5 
43.8 
50.0 
50.0 
50.0 
2S.1 
,55.  0 
60.0 

60.0 

62.  5 

75.0 
50.0 
75.0 
70.0 
75.0 
50.0 
70.0 
92.5 

92.5 
70.0 
42.0 

2< 

Building  laborers 

Plasterers'  laborers... . 

11 

Carpenters 

55.  0 
47.5 

56.3 
35.0 
45.0 
68.8 

Plumbers  and  gas  fitters 

Sheet  metalworkers 

50 

Cement  workers  (finishers) 

44 

Engineers     (portable    and 

Steam  fitters. .          ... 

59 

hoisting) 

Steam  fitters'  helpers 

Stonemasons 

Struct  ural-irou  workers 

Structural-ironworkers  (fin- 
ishers^  

7« 

Hod  carriers 

27 

Inside  wiremen 

54 

Marble  setters 

Marble  setters'  helpers 

54 

Painters 

42. 5 

60.0 

68.8 

41 

12 

Painters  (sign) . . 

Tile  layers'  helper-;  . 

PITTSBURGH.  PA. 
(.\verage  increase.  32.8  per  cent.] 


Bricklayers 

Building  laborers 

Carpenters 

Cement  workers  (finishers). . 
i^ngineers     (portable    and 

hoisting) 

Hod  carriers 

Inside  wiremen 

Marble  setters 

Marble  setters'  helpers 

Painters 

Painters  (sign) 


70.0 
37.5 
56.3 
50.0 

56.3 
40.0 
57.  5 
62.5 
37.5 
56.3 


90.0 
45.0 
80.0 
75.0 

80. 0 
60.0 
75.0 
75.0 


67.5 


Plasterers 

Plasterers'  laliorers 

Pluml)ers  and  gas  fitters . . . 

Sheet  metalworkers 

Steam  fitters 

Steam  fitters'  helpers 

Stonemasons 

St  rucl  lual-irou  ^vorkers 

Structural-iron  workers  (fin- 
ishers)   

Tile  layers 

Tile  layers'  helpers 


6S.  S 

8.5.0 

40. 0 

60.0 

55. 0 

75.0 

5.5.0 

80.0 

62.5 

80.0 

37.5 

50.0 

55.0 

65.0 

62.5 

87.5 

62. 5 

87.5 

62.5 

67.5 

43.  S 

ECOifOMICS   OF   THE   CONSTRUCTION   INDUSTRY. 


199 


Table  83. — Percentage  increase  in   hourly    ivage  rale  for  buildimj  tradesmen   in  lau-ge 
Amei'ican  cities,  1914-1918 — Continued. 

PORTLAND,  OREG. 
[Average  increase,  35.6  per  cent.] 


Hourly  rate. 

Trades. 

Hourlj'  rate. 

Trades. 

1914 

1918 

Per 
cent 
in- 
crease. 

1914       1918 

Per 
cent 
in- 
crease. 

Bricklayers 

Cents. 
75.0 
?7.5 
50.0 
50.0 

62.5 
50.0 
56.3 
68.8 
37.5 
50.0 
62.5 

Cents. 

100.0 
62.5 
75.0 
62.5 

87.5 
75.0 
72.2 
75.0 

33 
67 
50 
25 

40 

50 
28 
9 

Cents.    Cents. 
75. 0  ,  100. 0 
50  0  j     7.S  ft 

3.1 

Building  laborers 

Palsterers' laborers      

4) 

Plumljers  and  gas  fitters 

Sheet-metal  workers 

75.0 
56.3 
75.0 
75.0 
62.5 

62. 5' 
68.3 
40.6 

90.0 
82.5 
90.0 
100.0 
87.5 

87.5 
81.3 
56.3 

-M 

Cement  workers  (finishers). 

47 

Engineers     (portable    and 

Steam  fitters 

20 

hoisting) 

33 

Hod  can  iers       

Structiu-al-iron  workers 

Structural-iron  workers  (fin- 

40 

Inside  wtremen 

Marble  setters 

40 

Marble  setters'  helpers 

Painters 

Tile  layers 

18 

70.0 
81.3 

40 
30 

Tile  layers'  helpers 

39 

Painters  (sign) 

PROVIDENCE,   R.   T. 
[Average  increase,  29.8  per  cent.] 


Bricklayers 

Building  laborers 

Carpenters , 

Cement  workers  (finishers). 
Engineers     (portable    and 

hoisting) , 

Hod  carriers , 

Inside  wiremen 

Pa  inters 

Plasterers 


65.0 

70.0 

7 

2.5.0 

42.0 

68 

50.0 

70.0 

40 

50.0 

62.5 

25 

50.0 

62.5 

25 

30.0 

45.0 

50 

50.0 

60.0 

20 

45.5 

62. 5 

37 

62.5 

68.8 

10  ! 

j 

Plasterers'  laborers 

Pluml>ers  and  gas  fitters... 

Sheet-metal  workers 

Steam  fitters 

Stonemasons 

Stractural  iron  workers. . . . 
Stractural-iron  workers  (fin- 
ishers)   , 

Tile  layers 

Tile  layers'  helpers 


48.0 
48.0 
43.8 
65.0 
62.5 

62.5 
62.5 


50.0 
75.0 
57.0 
65.0 
70.0 
80.0 

80.0 
68.8 
37.5 


RICHMOND,  VA. 
[Average  increase,  54.4  per  cent. 


Bricklayers 

65.0 
37.5 

43.8 
30.  tj 
50.0 

75.0 
62.5 
75.0 
60.0 
75.0 
60.0 

lo 
67 
71 
96 
50 

1 

1  Steam  fitters 

50.0 
56.3 

56.3 
50.0 

75.0 

sao 

80.0 

50 

Carpenters . .                ... 

1  Structural-ironworkers 

1  Structural-iron  workers  (fin- 
ishers)   

43 

Painters 

43 

Plumbers  and  gas  fitters 

Sheet  metal  workers 

Tile  layers 

ST.  LOUIS,  MO. 
[Average  increase,  18.9  per  cent.) 


Bricklayers 

Building  laborers 

Carpenters 

Cement  workers  (finishers). 
Engineers  (portable  and 
hoisting): 

One  engine 

Two  engines 

Hod  curriers 

Inside  wiremen 

Marble  setters 

Marble  setters'  helpers 

Painters 


75.0 

85.0 

13 

25.0 

50.0 

100 

62. 5 

70.0 

12 

65.0 

75.0 

15 

75.0 

87.5 

17 

87.5 

100.0 

14 

50.0 

65.0 

30 

65.0 

86.3 

33 

68.8 

75.0 

9 

37.0 

40.0 

7 

60.0 

75.0 

25 

Painters  (.sign ) 

Plasterers 

Plasterers'  laborers 

Plumbers  and  gas  fitters . . . 

Sheet  metal  workers 

Steam  fitters 

Steam  fitters'  helpers 

Stonemasons 

Structural-iron  workers 

Struclurai-iron  workers  (fin- 
ishers)   

Tile  layers 

Tile  layers'  helpers 


fiS.  N 

7,-... 

75.0 

87.5 

56. 3 

62.5 

75.0 

SI.  3 

ra.o 

75.0 

75.0 

75.0 

37.5 

43.8 

70.0 

70.0 

65.0 

80.0 

65.0 

80.0 

68.8 

75.0 

37.5 

43.  S 

200 


ECONOMICS    (»F   TMK    COXSTIU'CTION    INDUSTRY. 


Tabik  8:i. — Perccnta(je   increaae   in  hourly  vacjc  rate  for  builtling  Irndcsmm  in  large 
American  cities,  1914-1018 — Continued. 

ST.  PAUL,  iMINN. 
[Average  increase,  24.2  per  cent.] 


Trades. 


Bricklayers 

Carp('iitors 

Cement  workers  (flnishcrs).. 
Kn^ineors     (portable     and 

hoisting') 

Hod  earners , 

Inside  wiremen , 

Marble  setters , 

Marble  setters'  helpers 

Painters , 

I'ainters  (sign) , 


Hourly  rate. 


Cents. 
70.0 
50.0 
50.0 

55.5 


50.0 
62.5 
31.3 
50.0 
56.3 


1018 


Cents. 
75.0 
(iO.O 
75.0 

67.5 
50.0 
68.  <S 
75.0 


62.0 
65.0 


Per 

cent 


Trades. 


Plasterers 

Plumbers  and  k;i.s  fitters... 

Sheet  metal  workers 

Steam  fitters , 

Steam  fitters'  helpers 

Stonemasons , 

Structural-iron  workers 

Structural-iron  workers  (fin 

ishers) 

Tile  hiyers 

Tile  layers'  helpers , 


Hourly  rate. 


Centi. 
62.  r, 
02. 5 
50.0 
50.0 
30.0 
65. 0 
62.5 

62.5 
62.5 
31.3 


1918 


Cents. 
75. 0 
75. 0 
CJ.O 
75.0 
40.0 
75.0 
75.0 

75.0 
fiS.8 
37.5 


SALT  LAKE  CITY,  UTAH. 
[Average  increase,  23.2  per  cent.] 


80.0 
62.5 
62.5 

62.5 
."iO.  0 
56,3 

87.5 
82. 5 
75.0 

81.3 
62.5 
75.0 
75.0 
75.0 
68.8 
100.0 

9 
32 
20 

30 
25 
33 

33 

10 
33 

Plasterers'  laborers 

56.3 
75.0 
57. 5 
75.0 
62.5 
62.5 

62.5 

08.8 
87. 5 
75.0 
87.5 
62.  5 
81.3 

81.3 
75.0 

40.6 

22 

Plumbers  and  gas  fitters 

Sheet  metal  workers 

Steam  fitters 

17 

Cement  workers  (linishers). . 
Engineers     (portable    and 

30 
17 

Stonemasons 

Hod  carriers 

Structural-ironworkers 

Structural-iron  workers  (fln- 
ishers) 

30 

30 

66.3 
62.5 
75.0 

Tile  layers 

Tile  la  vers'  helpers 

Plasterers 

SAN    FRANCISCO,  CALIF. 
[Average  increase,  23.2  per  cent.] 


Bricklayers 

Building  laborers 

Can^cnters 

Cement  workers  (finishers) . 
Engineers     (portable    and 

hoisting) 

Hod  carriers 

Inside  wiremen 

Marble  setters 

Marble  setters'  helpers 

Painters 

Painters  (sign) 


87.5 

100.0 

14 

31.3 

50.0 

60 

62.  5 

87.5 

40 

75.0 

87.5 

17 

75.0 

87.5 

17 

50.0 

62.5 

o-, 

62.5 

75.0 

20 

62.  5 

75.0 

20 

37.5 

50.0 

33 

59.4 

75.  0 

26 

6S.8 

81.3 

IS 

Plast  erers 

Plasterers'  laborers 

Plumbers  and  gas  fitters 

Sheet  metalworkers 

St  cam  fitters 

Steam  fitters'  helpers 

Structural-iron  workers 

St ruct ural-iron  workers  (fin- 
ishers)   

Tile  layers 

Tile  layers'  helpers 


87. 5 
62.5 
75.0 
6S.8 
75.0 
37.5 
75.0 

62.5 
75.0 
37.5 


100.0 
68.8 
87.5 
82.5 
87.5 


87.5 

87.5 
81.3 
50.0 


SCRANTON,  PA. 
[Average  incraase.  39.0  per  cent.) 


Bricklayers  . 

60.0 
25.0 
47.5 

50.0 
32.5 
46.9 

7.5.0 
50.0 
60.0 

62.5 
50.0 
62.5 
68.8 
5.5.0 
70.0 
50.0 

2". 

100 
26 

25 
54 
33 

38 

27 



Plumbers  and  pas  fitters 

Sheet  metal  workers 

46.9 
46.9 
46.9 
2.-..  0 
50.0 
56.3 

62.5 
62.5 
62.5 
43.8 
75.0 
68.8 

6S.8 
60.0 
31.3 

33 

33 

Carpenters. . 

Steam  fitters. .        

33 

Engineers     (portable    and 
hoisting) 

Steam  fitters'  helpers 

75 

Sionemasons 

50 

Hod  carriers 

Structural-iron  workers 

St  ructural-iron  workers  (fin- 
ishers).   

22 

Inside  wiremen 

Marble  setters 

Painters 

40.0 
55.0 

Tile  layers 

Tile  layers'  helpers 

.50.0 

20 

Plasterers 

riasterers'  laborei"s 

ECOXOMICS    OF   THE    COXSTRUCTIOX    IXDUSTRY.  201 

Table  83. — Percentage  Ino'ease  in  Jiourlt/  uagc  rate  for  building  trades-nun  in  large 
Ameriran  cities,  1914-1918 — Continued. 


SEATTLE,  WASH. 
[Average  increase,  37.0  per  cent.] 


Trades. 


Bricklayers 

B  iiildinj;  laborers 

Carpenters 

Cement  workers  (finishers). 
En'dneers    (portaljle    and 

hoislinf;) 

Hod  carriers 

Inside  wirenien 

MarWe  setters 

Marble  setters'  helpers 

Painters 

Painters  (sign) 


Hourlj'  rate. 


Cent3. 
75.  0 
37.  .5 
5t).3 
62.  -5 


1918 


Cents. 

100. 0 
56.3 
82.  .■> 
Si.  3 


Per 

cent 


62.  .5 

87. .-. 

43.. S 

62.  .5 

62.  .5 

87.  .i 

62.  .i 

75.0 

37. .) 

56.3 

56.3 

7.5.0 

62.0 

87.5 

Trades. 


Plasterers 

Plasterers'  laborers 

Plumbers  and  gas  fitters 

Sheet  metal  workers 

Steam  fitters 

Stonemasons 

Structural-iron  workers 

Structural-iron  workers  (fin- 
ishers)   

Tile  layers 

Tile  layers'  helpers 


Hourly  rate. 


Cenfi. 
75. 0 
50.  0 
75.0 
62.5 
75.0 


62. 


Cents. 
100.0 

75.  0 
100.0 

82.5 
100.0 
100.0 


62. 5  '  87. 
68. 8  1  81 . 
4K. 


Per 
cent 

in- 
crease. 


SPRINGFIELD,  ILL. 


WASHINGTON,  D.  C. 
•Vverage  increase,  38.7  ner  cent.] 


Bricklayers 

Building  laborers 

Cari^enters 

Engineers    (portable    and 

hoisting) 

Inside  wiremen 

Marble  setters 

Painters 

Plastcrere 

Plasterers'  laborers 


66.7 

75.0 

12 

25,0 

50.0 

100 

50.0 

75.0 

50 

62.5 

80.0 

28 

60.0 

75.0 

25 

62.5 

75.0 

20 

50.0 

75.0 

50 

62.5 

75.0 

20 

31.3 

50.0 

60 

Phimbers  and  gas  fitters 

Sheet  metal  workers 

Steam  fitters 

S team  fitters'  helpers 

Stonemasons 

Structural-iron  v/orkers 

Structural-ironworkers  (fin- 
ishers)   

Tile  layers 

Tile  layers'  helpers 


56.3 

75. 0. 

'    50.0 

75.0 

.55.0 

75. 0 

30. 0 

37.5 

66. 7 

87.5 

62.5 

92.5 

62.5 

92.5 

56.3 

68.8 

37.5 

33 
50 
33 

32 
33 


Building  laborers 

37.5 

Inside  wiremen 

55.0 
50.0 
66.3 

Carpenters 

55.0 
56.3 

Painters 

Cement  workers  (finishers).. 

Steam  fitters 

Table  84. ^P«'  cent  increase  of  the  wage  rate  r)f  building  trades.  1914-1918. 


City. 


.^.tlanta,  Ga 

Baltimore,  Md . . . 
Birmingham,  Ala. 

Boston,  Mass 

Buffalo,  N.Y 

Charleston,  S.C. 

Chicago,  111 

Cincinnati,  Ohio. . 
Cleveland,  Ohio. . 

Dallas,  Tex 

Denver,  Colo , 

Detroit,  Mich 

Fall  River,  Mass. 
Indianapolis,  Ind. 
Jack.sonville,  Fla. 
Kansas  ''ity.  Mo. 
Little  Rock,  Ark. 
Los  Aneeles.  Calif 
Louisville,  Kv. . . 
Manchester,  N.  H 


Per  cent, 
increase. 


47.4 
4.S.  7 
27.7 
29.8 
26.  2 
47.1 
t.3.3 
18.2 
38.  I 
24.0 

32.  1 
:<(-..  5 
40.4 
1.5.8 
:«).  8 
21.0 

33.  0 
17.2 
27.7 
64.2 


Citv. 


Menij^his,  Tenn 

Milwaukee,  V/is 

Minneapolis,  Minn. . 

Newark,  N.  J 

New  Haven,  Conn. . 

New  ( )rleans.  La 

New  York,  Ivf.Y.... 

Omaha,  Nebr 

Philadelphia,  Pa 

Piltstiurgh,  Pa 

Por(l;in<i,  Oreg 

I'roviiloMce,  R.  I 

RichiiKiiKl,  V;i 

St.  Louis,  Klo 

St.  Paul,  iMina 

Salt  Lake  Citv,  Utah 
San  Franci.sco,  Calif . 

Sciaiilon,  Pa 

Seattle,  Wash 

Washington,  D.  C  .. 


Per  cent 
increase. 


26.6 
21.6 

20.8 
26.  .3 
25.  9 
25.  .s 
20.7 
24.2 
.39.  (■) 
32.7 
35.3 
29.8 
54.0 
18.7 
24.0 
23.0 
22.9 
39.4 
37.0 
38.5 


202  ECONOMICS   OF   THE   COXSTRUC'TION   INDUSTRY. 


% 

180 

160 

180 
160 

SOURCES 
us.  LABOR  OEPT.  unj   A  F.  jf  L. 

140 

140 

.€584 

151 

120 

.554-0 

120 

102 

100 

■Q  /I 

—.5030 

.5115 

5208 



103 

100 

.4-750 

80 

80 

YEARS 

1913 

1914 

1915 

1916 

1917 

1918 

% 

AVERAGE  ANNUAL  HOURLY 

SCALE  OF  BUILDING  TRAOES 

MAY  1913-  MAY  1918 

WITH    INDEX  NUMBERS 

U.S.  DEPARTMENT  OF  LABOR 

INFORMATION  AND  EDUCATION    SERVICE 

DIVISION  OF  PUBLIC  WORKS  AND    CONSTRUCTION  DEVELOPMENT 

CHART  XIII. 


Ecoxo:\rTcs  of  the  coxstruc'Tio:^:  industry. 


'203 


'"4 


i 

I 

m 


y,^/. 


1 


I 


CD 

Ll 


UJ 


LJJ 


93% 


'y'^M!""' 


20% 


X 

A 
iLJi 


55/0  55  >^ 


< 

X 


UJ 


.^1 


65.9% 


illi-ii 


Z 

bJ 


28.5% 


PERCENTAGES  OF  INCREASE 

OF  COST  OF  LIVING  freport  ofNationdl 
Industrial  Conference  Board  July l9l4-Nov.l9l8) 
COMPARED  WITH  UNION  WAGE  SCALE 

BUILDING  TRAOESr'5'//:///f's-A&yW-A&//«{5y 

U.S.  DEPARTMENT  OF  LABOR 

INFORMATION  AND  EDUCATION   SERVICE 

DIVISION  OF  PUBLIC  WORKS  AND    CONSTRUCTION  DEVELOPMENT 


CHART  XIV. 


V.  SOURCES  AND  SUPPLY  OF  CAPITAL  FOR  THE  CONSTRUC- 
TION LNDUSTRY. 

METHODS  OF  SUPPLY  AND  TERMS  OF  REAL  ESTATE  LOANS. 

Temporary  and  permanent  loans. 

There  are  two  principal  methods  of  supplying  capital  to  the  building 
industry:  The  one  of  direct  application  may  be  termed  the  temporary 
method  or  building  loan.  The  one  of  indirect  application  is  the 
permanent  or  mortgage  loan.  The  first  method  is  peculiarly  the  basic 
principle  of  operation  followed  by  the  building  and  loan  associations, 
and  is  resorted  to  by  title  insurance  companies  and  by  life  insurance 
companies.  For  other  financial  institutions,  the  building  loan,  involv- 
ing as  it  does  much  technical  detail,  is  not  a  popular  investment. 
Building  loans  mider  $100,000  are  very  commonly  handled  by  build- 
ing-loan operators  as  individuals.  In  further  explanation  of  the 
method  by  which  building  loans  are  created,  a  quotation  is  given 
from  a  letter  written  by  a  member  of  the  firm  of  Charles  T.  Wills 
(Inc.),  of  New  York  City: 

The  business  of  making  building  loans  requii'cs  a  staff  experienced  in  building  con- 
struction and  in  the  making  of  daily  inspections  of  the  work  under  construction.  Only 
a  few  of  the  large  instixance  companies  are  so  equipped ;  quite  a  few  of  the  mortgage  and 
title  companies  are  so  equipped.  The  large  insurance  companies — for  example  the 
Metropolitan — doing  any  building  loan  business  accept  only  loans  of  this  character 
of  approximately  §200,000  or  over.  The  mortgage  and  title  companies  making  building 
loans  accept  loans  of  approximately  §100.000  and  over.  Loans  under  §100,000  are 
generally  handled  through  building  loan  operators  as  individuals  and  sometimes  under 
the  name  of  a  mortgage  company;  they  do  the  iinancing  either  with  their  own  funds  or 
sometimes,  where  the  loan  is  a  large  one  they  associate  themselves  with  one  of  the 
mortgage  and  title  companies,  who  underwrite  a  part  of  the  loan,  the  building  loan 
operators  financing  the  balance  themselves.  Some  of  the  large  insurance  companies 
and  mortgage  and  title  companies  make  what  is  known  as  a  combination  and  permanent 
loan.  Tliis  is  principally  done  where  the  loan  is  a  large  one,  as  it  saves  the  builder 
the  expenses  and  fees  of  refinancing  for  the  permanent  loan.  Small  country  homes  are 
generally  financed  by  building  and  loan  associations  and  sometimes  by  iccal  lawyers 
handling  small  funds. 

Beyond  the  spheres  already  spoken  of,  only  one  other  loan  is  found 
that  sufficiently  conforms  to  the  nature  of  a  building  loan  to  warrant 
mention.  We  refer  to  the  financial  paper  of  producers  of  building 
materials  and  supplies  which  origmates  in  cUrect  relation  to  con- 
struction development.  At  times  this  type  of  paper  undoubtedly 
forms  a  substantial  investment  in  the  portfolios  of  commercial  banks 
(if  discount  and  deposit,  for  it  is  said  that  there  was  discrimination 
against  it  by  the  rediscount  committees  of  the  Federal  Eescrve  banks 

205 


20G  ecojN'Omics  of  the  coxstruction  industry. 

(luring  [he  war  period,  when  fiiiaiicial  loslnctious  \\(*vi-  impose*!  upon 
uoiiossential  activities. 

The  permanent  loan  or  mortgage  investment,  although  of  less  direct 
a[)plication  to  the  building  industry,  is  of  great  importance  because 
the  volume  of  funds  so  invested  has  a  controlling  influence  upon  the 
prospects  of  the  building  industry.  The  reason  is  that  no  promoter, 
even  though  arrangements  for  a  building  loan  were  completely 
available,  would  venture  to  proceed  upon  construction  development 
unless  he  had  reasonable  assurance  that  permanent  accommodation 
also  could  be  arranged  for  in  advance  with  reasonable  certaintv. 

Methods  followed  in  making  loans. 

Bank  methods. — The  following  methods  are  generall\-  employed  by 
banks  when  they  invest  in  real  estate  loans:  First,  there  is  a  formal 
written  apphcation  made  in  detail  by  the  intendmg  borrower; 
second,  there  is  an  inspection  of  property  by  a  representative  of  the 
lendmg  institution.  There  is  also  a  valuation  made  by  a  reputable 
appraiser  and  then  there  follows  the  amiual  inspection  for  the  purpose 
of  keepmg  track  of  the  condition  of  the  property,  repairs,  insurance, 
etc.  The  maimier  in  which  this  inspection  is  carried  out  is  for  the 
most  part  governed  by  State  laws ;  in  someStates  itis  required  that  two 
trustees  make  an  inspection  and  in  others  it  is  specified  that  the  inspec- 
tion be  made  by  the  loan  committee  or  the  executive  committee  or 
such  other  part  of  the  organization  as  is  authorized  by  law  to  exercise 
this  function. 

Before  there  is  any  continuance  or  any  extension  of  a  loan  contract 
there  must  be  a  reappraisal.  Acceptance  of  the  loan  depends  in  part 
upon  the  bank's  policy  as  regards  its  zone  of  operations  and  preferred 
neighborhood.  Sometmies  the  policy  of  an  institution  will  restrict 
it  to  the  purchase  of  none  other  than  guaranteed  mortgages  which 
will  run  as  long  as  six  years.  Other  institutions  insist  that  the 
property  title  be  guaranteed  before  they  nicike  any  loan  at  all.  In 
contrast  to  an  institution  that  purchases  only  guaranteed  mortgages 
there  are  those  that  \\'ill  not  purchase  guaranteed  mortgages,  because 
they  have  their  owti  facilities  to  determine  whether  the  investment 
is  likely  to  be  satisfactory  and  amply  secured.  In  these  cases  they 
prefer  to  give  their  depositors  the  benefit  of  fidl  interest  rates. 

Title  guaranty  and  trust  company  metliods. — ^Vs  a  result  of  con- 
ferences with  institutions  of  the  title  guaranty  class  this  division  is 
able  to  submit  a  tabulation  of  their  general  plan  of  procedure  m  the 
development  of  a  market  for  a  mortgage  investment.  A  brief  sum- 
mary follows: 

1.  Investigation  of  owner's  title. 

2.  Guaranty  for  stated  ciiarge  if  title  is  clear. 

3.  Appraisal  of  propert}' value. 


ECOJifOMICS   OF   THE   COXSTRUC'TIOX   INDUSTBY.  207 

4.  Actual  investment  in   a  mortgage  on  the  property.      (This 

step  is  considered  as  one  operation  and  is  not  to  be  confused 
with  the  method  followed  by  a  commercial  bank  when  it 
makes  a  loan  against  collateral  security.  In  this  case — of 
mortgage  mvestment — the  appraised  value  of  the  property 
apparently  never  appears  as  a  book  entry.) 

5.  Sale   of   the   mortgage   guaranteed   by   vendor    to   investor. 

Stated  charge  for  guaranty  is  usually  one-half  of  1  per  cent. 
It  therefore  follows  that  the  investor  is  protected  by — 

(a)  Guaranteed  title; 

(&)  Margin  of  excess  value; 

(c)   Company's  guaranty  of  the  mortgage  contract. 

6.  In  case  the  amount  is  a  very  large  one  arrangements  may  be 

made  to  sell  a  participatuig  mterest  in  this  mortgage 
investment  to  severjil  separate  investors.  In  this  case, 
the  steps  already  referred  to  are  consummated  in  tm-n 
with  an  additional  step,  that  the  origiuid  uivestment  is 
placed  in  the  hands  of  a  trustee  appointed  with  the  consent 
of  the  investor.  It  therefore  follows  that  the  investor's 
interest  in  common  with  the  interests  of  his  coinvestors  is 
protected  by — 

(a)  Guaranteed  title; 

(b)  Excess  margin  of  value; 

(c)  Companj's  guaranty  of  the  mortgage  contract; 

(d)  Intervention  of  a  competent  trustee  chosen  to  enforce 

performance  of  legal  technicalities  according  to  the 
nature  and  terms  of  the  participation  and  the  mort- 
gage.    The  point  to  be  observed  m  all  this  procedure 
is  that   the   method   is   one  of   resale,  not  one  of 
rehi/potJiecatioii. 
Obvioush'  these  institutions  combine  two  most  important  func- 
tions: on  the  one  hand,  that  of  guarantor  of  title  and  mortgage;  and 
on  the  other,  that  of  a  distri})uting  medium  which  reaches  out  into 
those  sources  of  financial  capital  to  be  drawn  upon  only  by  means  of 
direct  appeal  to  the  private  investor.     It  is  to  the  private  investor 
that  the  title  and  trust  companies  offer  real  estate  d(>bentures  and 
real  estate  collateral  trust  bonds  and  it  is  due  in  a  large  measiu-e  to 
the  contribution  of  the  small  investor  who  acquires  a  partici[)ating 
hitorest   in   iaj-ge    mortgages    that    these    concerns    can    operate   so 
successfully. 

To  iiulicate  what  an  important  part  the  feature  of  title  gnaianiy 
])luys  in  real  estate  development,  attention  is  cjdled  to  the  following 
abstract  from  the  Annual  Report  of  the  Federal  Farm  Loan  Board 
for  1918,  which  states: 

It  was  found  in  many  States  that  the  abstracting  of  titles  to  farm  laiula  wud  prac- 
ticallv  an  unknown  business.     The  offices  of  an  abstractor  were  usuallx-  jHTformed  by 


208  KCONO.MUS    OF   TIllC    CONSTRl'*  TlOX    INDUSTRY. 

a  title  searchiM'  wlioso  piartifo  was  to  mako  for  liia  client  in  oaf  h  instanfo  eiuh  search 
of  the  record  as  he  deemed  the  case  in  liand  to  demand,  and  nsnally  to  report  verhally 
thereon. 

It  was  properly  felt  hy  the  hanks  that  they  must  have  ovifU'neo  of  ineonteetahle 
title. 

Early  in  the  present  year  a  plan  was  worked  out  hy  which  the  leading  surety  com- 
panies of  the  country  have  united  in  writing  honds  guaranteeing  the  interested  hanks 
from  loss  by  reason  of  failure  of  title.  This  guarantee  is  based  upon  a  search  of  the 
record  for  the  period,  the  running  of  which,  in  the  several  States,  vests  title  by  posses- 
sion, this  period  varying  from  8  to  21  years.  This  })ond  is  furninhed  at  a  co.st  of  one- 
fourth  of  1  per  cent  of  the  amount  of  the  loan  with  a  minimum  charge  of  .'*2..50,  which 
expense  is  borne  by  the  borrower.  Tt  is  found  that  this  method  reduces  the  cost  of 
record  search  so  much  that  the  total  expense  to  the  borrower  is  much  less  than  under 
the  former  system,  while  delays  on  account  of  title  are  largely  eliminated  and  the 
security  of  the  banks  against  failure  of  title  is  made  absolute. 

As  this  business  is  profitable  to  the  surety  companies,  the  question  naturally  arises, 
could  not  the  banks,  which  would  have  no  expense  in  that  connection,  insure  the  same 
safety  at  a  less  cost  to  borrowers  by  collecting  even  a  smaller  sum  and  placing  the 
same  in  a  title  guaranty  fund  to  cover  loss  by  possible  failure  of  title. 

Building  and  loan  association  methods. — Operating  methods  of 
building  and  loan  associations  hare  enabled  them  in  some  cases  to 
go  through  38  years  of  business  experience  v.ithout  losing  a  doUar. 
The  resources  of  the  building  and  loan  association  consist  of  the  stock 
subscription  of  its  members  and  the  moneys  left  with  it  by  depositors 
who  use  it  as  a  savings  bank.  A  man  applymg  for  a  loan  subscribes 
for  stock  equal  to  the  loan  which  he  desires  to  receire.  He  is  then 
obligated  to  pay  for  his  stock  at  a  weekly  rate  per  share.  This 
method  of  installment  payment  upon  shares  really  represents  a 
method  of  installment  payment  of  the  mortgage  loan.  There  are 
various  procedures  foEowed  in  respect  to  the  method  of  issuing  shares. 
The  principal  plans  are  still  known  as  the  tei-minating,  serial,  or 
continuous  plan. 

Loans  arc  made  to  subscribers  in  the  order  of  their  apphcation, 
there  being  always  a  long  waiting  list.  Before  the  loan  is  made  the 
lot  where  construction  is  to  take  place  and  the  type  of  builduig  must 
be  made  known  to  the  association  and  approved.  If  the  subscriber 
o^vns  his  land,  he  may  immediatc^h"  obtam  a  loan  of  two-tliirds  of 
the  combined  value  of  land  and  buildmg,  provided  there  are  funds 
available  to  lend  him.  If  the  subscriber  does  not  ovm.  the  land,  he  can 
not  obtain  his  loan  until  his  share  payments  have  created  an  ec|uity 
equal  to  one-third  of  the  value  of  his  future  home.  Sometimes  he  is 
able  to  build  even  earlier  than  this  date,  because  he  gets  a  contractor 
to  take  a  second  mortgage  on  his  prospective  home,  the  first  mortgage 
going  to  the  building  and  loan  association. 

In  general,  then,  a  man  who  has  small  capital — and  in  some  cjises 
no  capital  at  all,  only  an  earning  power — is  enabled  to  build  by  the 
help  of  the  buildijig  and  loan  association  out  of  savings.  The  present 
limitation  upon  the  effectiveness  of  these  associations  is  the  lack  of 


ECONOMICS   OF   THE   CONSTRUCTION   INDUSTRY.  209 

capital  behind  them.  What  they  need  is  the  mechanism  for  making 
liquid  the  real  estate  mortgages  which  are  their  assets — ability  to 
rediscount  them  at  a  reasonable  rate  of  interest. 

Insurance  company  methods, — To  a  large  extent  hisurance  com- 
panies are  able  to  deal  direct  with  borrowers  that  apply  for  the  use 
of  mvestment  fmids  for  real  estate  purposes,  and  these  companies 
therefore  maintain  in  each  important  city  included  in  their  lending 
field  one  of  their  own  property  inspectors  and  representatives. 
However,  there  are  also  two  classes  of  independent  agencies  through 
which  these  institutions  deal.  Some  of  these  agencies  submit  appli- 
cations received  from  private  parties  for  proposed  loans  direct  to 
an  insurance  company,  so  that  in  all  cases  where  the  security  is 
satisfactory  and  the  application  is  approved,  the  loans  are  made 
out  by  the  lender  to  the  borrower  for  the  hitter's  direct  account. 
Also,  there  is  always  a  number  of  agencies  that  make  loans  to  bor- 
rowers on  their  own  accomit  in  much  the  same  way  that  private 
buildnig  operators  do,  relying  on  their  ability  to  sell  this  paper 
afterwards  to  insurance  companies  or  other  fu-ms.  In  this  way 
substantial  lines  of  mortgage  loans  are  accumulated  for  ultimate 
resale,  sometimes  by  the  local  banks  and  at  other  times  by  pro- 
prietors and  partnerahips  in  this  lijie  of  business.  If,  in  the  process 
of  inspection  and  examination  to  which  the  insurance  companies 
subject  these  mortgages,  all  these  investments  pass  the  standard 
requirements,  the  agency  receives  payment,  and,  thus  provided 
with  new  resources,  is  able  to  continue  the  process  by  accumulating 
another  line  of  mortgages.  Whether  the  process  be  that  of  buying 
mortgages  on  commission  or  buying  them  outright  for  reassignment 
later,  it  is  understood  that  under  certain  conditions  any  mortgage 
which  is  below  the  standard  requirements  may  be  returned  to  the 
agent  for  credit  by  the  insurance  company.  This  has  been  the  prac- 
tice with  respect  to  farm  loans,  and,  on  the  authority  of  recent  corre- 
spondence with  insurance  companies,  essentially  the  same  practice  is 
found  in  respect  to  loans  on  real  estate  other  than  farm  properties. 
Large  projects  whether  adjacent  or  comparatively  remote  are  always 
of  interest  as  security  for  building  loans,  unless  the  lencHng  insti- 
tutions are  compelled  by  current  conditions  temporarily  to  refrain 
from  offering  their  funds.  In  the  case  of  smaller  projects  in  remote 
cities,  it  has  been  possible  at  times  for  promotera  to  obtain  reason- 
able assurance  of  funds  from  the  big  institutions  iji  New  York  hi 
such  a  way  that  they  have  been  enabled  to  secure  adrsince  funds 
from  their  local  banks,  pending  completion  of  the  proposed  building 
operations.  In  normal  times  this  has  been  a  method  of  procedure 
often  resorted  to,  and  will,  of  courae,  be  successfid  so  long  as  the 
borrower  can  rely  on  that  other  very  important  source  of  permanent 
capital  supply,  the  mortgage  loan. 
121297°— 19 14 


210  Ecoi^roMics  or  thk  construction  industry. 

Security  required. 

With  respect  to  the  security  required  by  all  classes  of  ijistitutions 
which  huA'e  been  addressed,  including  building  ujid  loan  associations, 
it  may  be  stated  that  no  loan  in  exct^ss  of  70  per  cent  of  the  value 
of  the  property  upon  which  it  is  based  has  been  reportetl.  Replies 
to  questionnaires  which  this  division  has  sent  out  iiuUcate  that  in 
some  instances  the  percentage  of  the  amomit  loaned  to  the  value  of 
the  pro])erty  has  dropped  from  60  per  cent  in  1913  to  oO  per  cent 
in  1919  and  that  the  range  of  percentages  of  loans  to  value  between 
ojie  locality  and  another  will  differ  as  much  as  30  per  cent,  running 
from  40  per  cent  to  70  per  cent  of  the  value.  In  addition  to  the 
fact  that  iji  some  localities  owing  to  certain  local  conditions  the 
per  cent  has  dropped  to  the  figure  indicated,  it  must  be  remembered 
that  in  other  localities  where  they  continue  to  quote  a  nominal 
percentage  within  the  ranges  of  50,  60,  and  70  per  cent  loaned,  the 
lenders  admitted  that  they  were  valuing  ail  new  construction  at  a 
discoimt  from  the  original  cost,  ranging  all  the  way  from  5  to  30  per 
cent,  because  of  the  higher  cost  of  construction  prevailing  in  1919  as 
compared  with  previous  years. 

In  coimection  with  this  summary  of  security  required,  it  will 
be  of  interest  to  quote  from  a  letter  written  by  the  president  of  a 
large  savings  bank: 

Replying  to  the  second  question  as  to  what  per  cent  of  the  value  of  property  waa 
the  limit,  this  is  purely  and  simply  a  hypothetical  question  which  is  determined  by 
personal  opinion  or  by  the  appraised  value  of  property.  ^^Tiile  duiing  our  30  yeai-a 
ol"  experience  it  has  been  our  endeavor  to  try  to  make  them  on  what  we  consider  a 
50  per  cent  value  of  i:)roperty  of  all  descriptions  (except  that  we  do  not  loan  on  indus- 
trial jilants),  yet  the  true  safety  of  a  loan  is  that  the  loan  must  be  small  enough  so 
that  under  foreclosure  proceedings  the  debt  would  be  collected.  The  Aar\-ing  condi- 
tions existing  from  time  to  time  make  an  o]nnion  placed  at  one  time  not  such  as 
would  govern  at  other  periods. 

As  to  the  question  of  loans  made  in  1919,  and  what  proportions  we  consider  the  value 
of  new  liuildings,  we  endeavor  to  consider  the  value  of  new  buildings  on  the  l>aai3 
of  what  the)'  are  worth  through  a  period  of  years.  There  can  be  no  fixed  definite 
rule  made  as  to  the  basis  of  a  loan  on  property.  The  considerations  entered  into  are 
so  varying,  both  as  to  the  location  of  property,  the  normal  hazard  connected  there- 
with, the  changing  conditions  aiising  from  changes  in  values  in  different  sections  of 
the  city,  the  chai'acter  of  the  property  and  its  location,  that  each  case  has  to  be 
taken  up  by  itself  and  determined  from  its  characteristics  as  existing. 

Rate  of  interest. 

The  rate  of  interest  on  real  estate  loans  varied  in  1913  with  the 
section  of  the  country.  In  thickly  settled  regions  the  rate  was  as 
low  as  4^  per  cent,  but  was  much  higher  in  the  West  and  South. 
In  general,  the  rate  ranged  from  4j  per  cent  to  8  i)er  cent  in  1913. 
Tlie  most  common  rate  was  apparently  5  to  6  ]>er  cent.  From  1913  to 
1918  there  appears  to  have  been  an  increase  of  from  one-half  per  cent 
to  1  per  cent  in  rates  the  country'  over. 


EG0X0MIC3   OF   THE    COXSTRUCTIOX    IXDUSTKY.  211 

Duraiioii  of  loans. 

Late  in  November,  1918,  the  savings  bank  section  of  the  ^Vmerican 
Bankers'  Association  began  an  extensive  inquiry,  both  at  homo  and 
abroad,  into  the  lending  methods  of  institutional  investors  in  mort- 
gages and  real  estate  loans.  The  original  feature  of  this  study  will 
be  a  careful  analysis  of  an  un])ublished  manuscript  prepared  abroad 
relating  to  the  methods  and  practices  followed  in  Germany  and 
Austria  up  to  1914.  The  association  also  sent  to  England  a  special 
expert  to  investigate  and  report  on  the  methods  and  practices  devel- 
oped there.  As  earl}^  as  November  28,  1918,  the  association  sent 
out  a  letter  to  a  selected  list  of  representative  State  banks,  trust 
companies,  and  msurance  concerns  asking  the  following  questions: 

1.  What  is  the  method  employed  by  you  in  making  and  caring  for  real  estate  loans? 

2.  For  how  long  a  term  do^  you  make  mortgage  loans  and  what  is  your  practice 
when  the  loans  matiue? 

3.  Do  you  require  any  reduction  of  the  principal  diu-ing  the  life  of  the  mortgage 
loans  periodically  or  by  call?  If  so,  how  and  when?  d  should  appreciate  copies  of 
forms  used  in  calling  of  loans  or  a  portion  thereof  and  a  description  of  the  method 
pursued.) 

4.  Do  you  requiie  a  reduction  of  the  principal  before  renewing  a  mortgage  loan? 

5.  Do  you  believe  in  the  amortization  of  mortgage  loans? 

The  secretary  of  the  New  York  committee  very  kindly  permitted 
an  examination  of  all  the  correspondence  which  had  been  received 
m  reply  to  the  above  questionnaire.  Upon  the  basis  of  the  interest 
and  loiowledge  evidenced  \^  this  correspondence,  the  committee 
selected  six  mortgage  leadei-s'  in  each  State  to  act  as  subcommittees 
through  wliicti  to  cany  on  the  association's  educational  work  in 
stimulating  support  for  more  scientific  methods  of  caring  for  real 
estate  loans. 

By  far  the  largest  number  of  letters  received  by  the  American 
Bankers'  Association  indicated  that  three  years  was  the  usual  time 
for  a  city  real  estate  loan  to  run.  Many  of  the  institutions,  how- 
ever, showed  that  they  were  accustomed  to  grant  loans  for  five  3'ears, 
but  no  loans  for  a  period  in  excess  of  five  years  appeared  to  be  granted 
on  city  property.  Many  letters,  in  stating  the  duration  of  loans  to 
be  one,  three,  and  five  years,  contained  the  following  characteristic 
comments : 

One  year  and  if  security  is  satisfactory  allowed  to  remain  an  open  mortgage. 

One  year  and  allowed  to  run  as  a  due  mortgage  subject  to  inspection  and  reappraisal. 

One,  three,  fiA'e  years;  no  longer  than  fi\e  years. 

One  year  and  continued  indeiinitely  if  interest  and  taxes  arc  paid  and  pmiwrry  is 
kept  in  repair. 

limit  six  years,  when  buying  is  guaranteed. 

Our  mortgages  are  drawn  for  one  to  dye  ^■ears,  but  are  not  paid  when  due.  Wa 
prefer  to  limit  oin-  loans  to  one  year  for  the  reason  that  we  can  immediately  thcreuftet 
demand  partial  payment  or  an  increase  in  rate  at  any  time. 


212  KCONOMICS   OF   THE    COXSTRUCTIOX    IXliCSTItY. 

It  is  ospecially  interesting  to  note  tlie  reply  of  one  coucorn,  which 
stated  that  it  had  ordinarily  been  accustomed  to  lend  f<»r  three 
yours,  })ut  rpxenthj  liad  reduced  its  lifnit  to  one  year.  No  reason  was 
given. 

The  most  surprising  reply  came  from  those  institutions  which' 
reported  that  "all  their  loans  were  made  payable  one  day  after  date' 
so  that  all  were  07i  call  and  no  renew^als  were  ever  made." 

Terms  of  renewal. 

Some  concerns  invariably  insist  upon  reduction  of  principal  be- 
fore extending  a  loan.  Others  require  reduction  of  principal  only 
wlion  the  mortgage  is  not  a  very  strong  one;  that  is,  if  the  property 
depreciates  or  the  mortgage  exceeds  60  per  cent  of  the  property 
value.  In  describing  their  so-called  terms  of  renewal  many  of  the 
concerns  emphaticall}'  stated  that  it  was  their  practice  not  to  renevj; 
that  they  allowed  their  loans  to  run,  b}'  continuing  or  extending 
tliem.  These  last  two  terms  indicate  that  extension  is  an  expedient 
for  avoiding  the  expense  of  recording  and  other  legal  details  that 
would  accompany  renewal.  The  following  quotations  relating  to 
renew^al  of  loans  are  characteristic : 

"Do  not  renew  loans;  they  really  become  demajid  after  lapse  of 
one  year. 

"Xever  pretend  to  collect  mortgage  so  long  as  interest  is  paid." 
"Seldom  extend,  unless  mortgage  is  guaranteed  at  expiration." 
A  very  good  indication  of  the  extent^  which  old-fashioned  methods 
of  real  estate  investmeiits  have  produced  stagnation  is  found  in  the 
foUowdng  quotation  taken  from  the  letter  of  one  of  the  large  Hart- 
ford insurance  companies: 

We  do  not  favor  loans  on  oil}'  properties,  because  the  borrower  has  been  falsely 
etjucated  to  think  he  has  jilaced  the  mortgage  in  perpetuity. 

Terms  of  principal  reduction. 

Only  18  per  cent  of  the  institutions  addressed  by  the  American 
Bankers'  Association  w^ere  not  in  favor  of  amortization.  The  most 
characteristic  objection  to  amortization  given  may  be  indicated  by 
the  following  quotation:  "Mortgage  loans  that  come  within  the 
classification  of  securities  prescribed  as  legal  investments  for  trustees 
are  especially  stable;  sometimes  the  land  value  alone  will  equal  the 
amount  of  the  loan.  For  this  reason  there  is  no  need  in  tlicse  cases 
of  adopting  an  amortization  schedule  which  would  tend  to  amioy 
beneficiaries  of  estates  with  constant  and  recmring  changes  in  se- 
curity held  for  their  benefit."  In  sliort,  the  objection  seemed  to  be 
that  trust  companies  do  not  wish  to  be  incumbered  with  the  addi- 
tional detail  of  administration  involved  in  amortization  and  there- 
fore are  inclined  to  plead  it  would  cause  inconvenience  to  their 
customers. 


ECONOMICS   OF   THE   CONSTRUCTION   INDUSTRY.  213 

Characteristic  remarks  of  bankers  on  the  reduction  of  prmcipal 
follow : 

"Reduction  is  at  discretion  whenever  possible  without  incon- 
venience to  mortgagor,  but  no  stated  periods  specified  and  no  special 
form  used." 

''Each  mortgage  treated  separately;  no  rules." 

"Reduction  requu-ed  on  one-year  mortgage  after  it  expires,  if 
security  is  not  satisfactory." 

"Purchase  money  mortgage  subject  to  reduction  by  semiannual 
payment." 

"Require  reductions  annually  or  semiannually  during  the  life  of 
the  mortgage,  when  surplus  security  is  not  fully  satisfactory." 

"No  reduction  on  three-year  dwellmg  house  loans,  but  in  case  of 
large  amounts  on  business  or  apartment  property  v,"e  generally 
require  annual  payment  of  principal  by  installment." 

"No  reduction  necessary,  as  all  our  real  estate  loans  are  on  demand 
with  interest  payable  semiannually  in  advance."  (Explanation: 
Due  to  Connecticut  State  laws.) 

"  We  re({uire  annual  payment  of  5  to  10  per  cent  on  account  of  prin- 
cipal." (Maine.) 

Title  insiiraiice  companies  of  New  York. 

Title  insurance  companies  are  described  by  Cyril  II.  Burdett  in 
Real  Estate  Record  and  Guide  of  May  18,  1918,  as  great  lending 
institutions  and  clearing  houses  at  w^hich  the  investor  in  mortgages 
on  real  estate  is  brought  into  contact  with  real  estate  owners  desuing 
loans.  Title  insiurance  companies,  with  theii*  affiliated  mortgage 
guaranty  companies,  have  outstandmg  in  guaranteed  mortgages  at 
the  present  time  over  five  hundred  million  doUars.  Practically  all 
loans  made  on  real  estate  in  New  York  City  are  made  by  either  title 
insurance  companies  du-ectly  or  by  lendera  who  obtain  policies  of 
title  insurance  issued  by  these  companies.  The  four  large  companies 
guaranteeing  mortgages  have  under  guaranty  at  the  present  time 
in  New  York  City  mortgages  amountmg  to  over  four  hundred  and 
fifty  million  doUars.  These  mortgages  have  been  made  for  periods  of 
thi-ee  years.  (Frank  Bailey,  vice  president  of  the  Bond  &  ^Mortgage 
Guarantee  Co.,  in  Record  and  Guide,  June  29,  1918.) 


214  ECONOMICS  OF  THE  OONSTBUCTIOK   INDUSTRY. 

Tiie  following  statement  of  the  Lawyers'  Mortgage  Co.,  of  59 
Liberty  Street,  New  York,  indicates  the  distribution  of  mortgages 
guaranteed  by  title  insurance  companies: 

Oidstanding  inortgayes  of  the  Launjers'  Mortgage  Co.  «.<?  dlilded  (unong  the  ctmji/ang'a 

customer.^. 

45  savings  banks ^io,  12G, 000 

l,570trustecy 35,485.000 

4,  715  indi\dduals fio,  040. 000 

243  charitable  institutions 12,  267, 000 

16  insurance  companies 6,  919, 000 

2S  tru^t  coinpanio- 7.  932, 000 

Total  mortgages  ontstandinc,  Dec.  31,  1918 142,  775, 000 

Total  mortgages  outstanding,  July  ] ,  1918 144, 083, 000 

It  will  be  obseiTed  from  the  above  table  that  individuals  hold 
nearly  one-half  of  all  the  mortgages  guaranteed  by  this  company. 
It  might  be  noted  also  that  the  total  amount  of  mortgages  guaranteed 
by  this  company  decreased  nearly  $2,000,000  from  July  1,  1918,  to 
December  31,  1918.  The  companj^  stated  that  since  August,  1914, 
it  has  paid  off  mortgages  amounting  to  $55,657,000,  or  nearly  40 
per  cent  of  all  outstanding  mortgages. 

The  Torrens  system  in  New  York. 

The  efficacy  of  the  Torrens  land  title  system  in  reducing  the  cost 
of  real  estate  loans  has  long  been  a  subject  of  controversy.  It  has 
recently  come  more  prominently  intp  the  public  eye  in  New  York. 
On  May  9,  1918,  Gov.  "VMiitman  signed  the  Torrens  title  bill,  amending 
the  law  as  it  had  been  operating  in  New  York.  (Record  and  Guide, 
May  11,  1918.)  Advocates  of  this  law  assert  that  it  enables  property 
owners  in  NeAv  York  ''  to  free  themselves  from  the  grip  of  title  com- 
panies'' and  that  every  property  owner  v/ill  find  it  to  his  advantage 
to  avail  himself  of  the  benefits  of  this  law.  Under  the  new  law,  it 
is  asserted,  the  registration  of  land  titles  can  be  made  at  moderate 
expense  and  in  a  short  period  of  tune,  unless  there  is  a  contested  title. 

Waiter  Fairchild,  secretary  of  the  Torrens  Title  League,  outlines 
the  methods  of  operating  under  tliis  law  as  follows  (Record  and 
Guide,  May  18,  1918): 

For  first  registration,  the  title  is  Examined  xmder  order  of  the  court.  Tlii?  oflRcial 
examination  is  done  by  an  examiner  in  the  registrar's  office  although  the  comt  may, 
if  applicant  requests,  accept  a  report  from  a  title  company  in  lieu  of  the  oflicial 
examiner's  report.  A  survey  must  be  furnished  by  the  petitioner.  The  court  set-3 
a  day  when  the  petitions  will  1)e  heard,  and  notices  of  the  hearing  f»re  sent  out  by  tho 
registrar.  On  the  return  day,  if  no  objections  are  found,  the  title  is  ordered  registered, 
and  assurance  premium  is  then  paid  to  the  registrar  and  the  owner  receives  a  certificate 
i>f  title.  Xfi  appeal  from  the  final  order  of  the  registrar  can  be  taken  after  30  daj-B, 
when  the  title  becomes  conclusive. 


EC0X0MIC3   OF   THE    COXSTRUCTIOX   INDUSTRY. 


215 


Tiie  costs  under  the  Torrens  law,  as  compared  witli  title  iiisui'ance 
companies'  costs,  have  been  tabulated  as  follows  by  Edv.aid  Polak, 
registrar  of  the  County  of  Bronx  (Record  and  Guide,  ^fay  IR,  1918) : 


Original  issues.                        Reissues. 

Amount. 

Tide 

company 

fees. 

Torrens           '^i*'" 

Torren.s 
feet. 

So,  000    !          $S.5.00 
10,0(K)               115.00 
25,000              205.00 
.50,000              320.00 
75.000              3S2.50 
10f);000               445.00 

841.00            $51.00              S3. 00 
51.00              69.00                3.00 
81.00             123.00                3.00 
131.00    1         189.50                3.00 
181.00    1        220.75                3.00 
231.00             252.00                3.00 
1                       1 

(A  detailed  accoimt  of  the  official  procedure  under  the  Torrens  law 
IS  given  by  James  A.  Donegan,  registrar  of  New  York  County,  in 
Record  and  Guide  of  June  1,  1918.) 

The  Torrens  law  is  severely  criticized  by  Cyril  PI.  Burdett,  via'i 
president  of  the  New  York  Title  &  Moi  tgage  Co.  The  objection  he 
raises  is  the  inadequate  equipment  of  the  offices  of  the  coimty  clerks 
and  registrars  in  New  York  City  for  making  title  researches.  They 
must  use  the  old  methods  of  digging  out  the  chain  of  title — a  long  and 
cumbersome  procedure.  In  connection  with  the  initial  registration, 
Mr.  Burdett  says,  the  registrar  will  be  required,  in  addition  to  making 
a  search  in  his  own  office,  to  search  in  the  coimty  clerk's  office,  iii. 
the  United  States  courts,  in  the  offices  of  the  tax  collector,  the 
comptroller,  and  the  county  treasurer.  He  will  also  have  to  make 
an  inspection  of  the  property  to  determine  all  existing  easements. 
In  connection  with  the  title  examination  by  a  title  insurance  com- 
pany, this  constitutes  a  very  important  part  of  the  service  and  makes 
up  a  considerable  part  of  the  expense.  He  asserts  that  taxpayei-s 
under  the  Torrens  law  will  have  to  pay  for  this  service.  The  great 
amount  of  detail  involved  in  title  examination  makes  it  necessary  to 
employ  a  large  number  of  persons.  The  simplest  title  will  require 
the  work  of  a  number  of  men  many  days  to  complete,  and  Mr.  Burdett 
believes  that  the  registration  of  a  title  luider  the  Torrens  system  can 
not  be  accomplished  in  30  days. 

The  New  York  law  le^^&llzing  investments  and  certificates  when  they 
cover  unencumbered  real  estate. 

The  Real  Estate  Record  and  Guide  of  May  11,  1918,  states  that  the 
Gilchrist  bill,  providing  that  trust  funds  may  be  invested  in  paits  of 
mortgages  held  by  trust  companies  and  title  guaranty  companies, 
was  approved  by  Gov,  Whitman.  In  addition  to  the  investments 
now  authorized  by  fiduciaries,  thoy  may  invest  in  shares  or  parts  of 
bonds  and  mortgages  which  themselves  are  authorized  iiivostnuMits 
for  trustees.     The  shares  in  which  such  investments  are  made  are 


216 


ECONOMICS    OF   THE    CONSTHUCTION    INDUSTRY. 


Aot  s\il)()r(liMaio  to  uii}'  other  shares  and  ai'o  not  subjeft  to  any 
prior  interest.  'I'lio  IxmkI  mid  mortgage  and  the  insurance  policies, 
guaranties  of  payment,  and  other  instruments  and  evidences  of  title 
)-elating  thereto  shall  ho  hold  for  the  ])enefifc  of  the  poi-sons  interested 
in  the  security  hy  a  trust  company  or  title  guaranty  company  or- 
ganized under  the  laAVs  of  the  State. 

The  experience  of  tlio  title  companies  and  mortgage  guaranty  com- 
panies shows  that  trustees  have  sought  this  form  of  investment  in 
niortgages.  It  frequently  happens  that  trust  funds  aie  not  large 
enough  to  take  an  entire  m.ortgage  on  large  units,  which  are  the  safest 
because  they  affect  the  most  modern  huildings  and  best-constructed 
buildings.  If  trustees  would  make  these  investments,  large  sums  of 
money  would  bo  available  for  mortgage  investments  which  now  are 
not  so  available. 

SUPPLY  OF    CAPITAL    FURNISHED  BY  EACH    OF   THE  CHIEF   LENDING 
INSTITUTIONS  IN  THE  UNITED   STATES. 

Sources  of  real  estate  loans  in  1913. 

The  following  table  shows  the  real  estate  loans  of  various  classes  of 
banks  and  of  insurance  companies  and  building  and  loan  associations 
in  1913. 

Table  85. — Real  estate  loans. 
•  [In  millions  oi  dollars. 1 


Per  cent 
of  total. 


Tnist  companies 

Savings  banks 

Stat  e  banks 

National  banks 

Private  banks 

Total  banks,  June  30 

Insurance  companies  Jan.  1 

liuilding  and  loan  association  assets  Jan.  1 

Grand  total 


576.3 
2,303.7 

555.  6 
76.8 
35.2 


9.3 

37.3 

9.0 

1.3 

.6 


3,  .547.  6 
1,485.1 
1,137.6 


57.5 
24.1 

18.4 


6, 170. 3 


It  will  be  noted  that  of  the  total  real  estate  loans  shown  in  Table  S5, 
amounting  to  $6,170,300,000,  banks  held  57.5  per  cent ;  insurance  com- 
panies held  24.1  per  cent,  and  buikUng  and  loan  associations  18.4  per 
cent.  Savings  banks  alone  held  37.3  per  cent,  or  more  than  either 
insurance  companies  or  building  and  loan  associations.  In  order  of 
importance,  savings  banks  rank  first,  insurance  companies  second, 
and  building  and  loan  associations  third.  Trust  companies  and 
State  banks  supplied  approximately  9  per  cent.  National  banks  and 
private  banks  were  practically  of  negligible  importance. 

Increase  in  real-estate  loans  by  banks,  1913-1918. 

In  Table  80,  based  upon  the  annual  reports  of  the  Comptroller  of 
the  Currency,  are  shown  loans  secured  by  real  estate  (including  mort- 


ECONOMICS   OF   THE    CONSTRU("TIOX    INDUSTRY. 


217 


gages  owned)  held  by  banks  and  trust  companies  in  the  United  States 
in  1918,  1917,  and  1918.  In  this  table  it  was  desu-ed  to  get  compar- 
able statistics  for  those  yejirs.  The  totals  as  they  stand  in  the  comp- 
troller's reports  are  not  comparable  because  in  1913  the  comptroller 
reported  real  estate  loans  by  State  banks  in  46  States,  by  mutual 
savmgs  banks  in  17,  by  stock  savings  banks  in  36,  by  private  banks 
in  27,  and  by  trust  companies  in  46,  while  in  1917  the  comptroller 
reported  real  estate  loans  for  State  banks  in  only  19  States,  for  mutual 
savings  banks  in  13,  for  stock  savings  banks  m  9,  for  private  banks 
in  12,  and  for  trust  companies  in  23.  It  is  readily  seen,  therefore, 
that  any  conclusions  which  might  be  drawn  by  comparing  the  reports 
of  tlie  comptroller  on  real  estate  loans  by  aU  banks  in  tlio  United 
States  in  1913  with  the  totals  he  gives  for  real  estate  loans  in  1917 
would  be  erroneous. 

To  make  these  figures  comparable,  it  is  necessary  to  fuid  for  1913 
the  total  real  estate  loans  by  different  classes  of  banks  hi  only  those 
States  which  are  reported  in  1917. 

Table  86. — Loans  secured  by  real  estate  (including  mortqafjes  owned)  held  bif  b(inJ:s  and 
trust  companies  in  the  United  States. 


1 

2 

In  all 

States 
reported 
in  1913. 

LiaU 

States 

reported 

in  1917. 

4 

Per 
cent 

col- 
umn 

3  is 
of  col- 
umn 
2. 

5 

InaU 

States 

reported 

in  1917. 

6 

In  all 

States 

reported 

in  1918. 

Total  for  all 

States  in 

1917  on  the 

assiunption 

that  col- 

umn5 

represents 

S3  per  cent 

of  total. 

8 

Total  for  all 

States  in 

1918  on  the 

assumption 

that  col- 

iunn6 

represents 

83  i>er  cent 

of  total. 

National  banks 

1913 
$76,819,93.3 
655,662,331 

1,815,585,610 

488,159,896 
.35,172,653 
576,3.34,682 

1913 
$76,819,933 
246,636,479 

1,791,901,491 

307,340,896 

25,-587,541 

490,813,465 



1917 
$185,424,000 
341,577,190 

2,112,081,686 

1918 
$185,117,000 
290,002,042 

2.0a5.,T.53.6.5S 

State  banks 

Mututa!       savings 
banks 

Stock       savings 
biinks . 

387,312,979      26.4R5.117 

Private  banks. . 

17,878,873 
632,846,177 

14,725,S&S 
555,655,502 

Ti-ust  companies 

Total 

3,547,695,105 

2,939,099,805 

83 

.3,677,120,9(J5.3,137,o39,207 

1 

$4,430,266,151 

*3,780,167,719 

Source:  Figures  in  columns  2,  3,  .),  and  6  as  given  in  annual  reports  of  the  Comptroller  of  the  Currency. 

In  Table  86  the  columns  are  numbered  from  1  to  8,  and  in  order  to 
make  the  meaning  of  this  table  clear  it  is  necessary  to  note  lierc  the 
significance  of  each  of  these  columns. 

In  column  2,  under  the  heading  of  all  States  reported  in  1913  the 
total  of  real  estate  loans  reported  by  the  Comptroller  of  the  Currency 
for  the  different  classes  of  banks  is  given.  It  wiH  be  seen  that  tliis 
amounts  m  the  aggregate  to  $3,547,695,105.  This  represents  prac- 
tically aU  the  banks  in  the  United  States. 

In  column  3,  imder  the  heading  States  reported  in  1917,  is  given 
the  real  estate  loans  reported  in  1913  by  the  Comptroller  of  the  Cm- 


218  ECONOMICS   OF   THE   (CONSTRUCTION   INDUSTRY. 

rency  by  tlic  difTcriMit  classes  of  l^unks  in  oiil\'  those  States  iiiclufled 
ill  the  comptrollor's  totals  for  1917.  In  other  -words,  the  figures  iii 
column  3  for  1913  are  comparable  witli  the  figiu'es  in  column  5  for 

1917,  and  do  not  represent  the  real  estate  loans  of  all  banks. 

In  comparing  tlie  totals  of  column  3  M'ith  column  2,  it  was  found 
that  the  former  was  83  per  cent  of  the  latter  as  sliown  in  column  4. 
In  column  5  is  giren  the  total  amount  of  real  estate  loans  by  different 
classes  of  banks  as  reported  in  1917.  As  already  stated,  these  totals 
represent  real  estate  loans  by  tlie  same  class  of  lianks  in  the  same 
States  as  figures  in  colunui  3. 

In  column  6  are  given  the  totals  for  real  estate  loans  by  the  different 
classes  of  banks  as  reported  by  tlie  comptroller  in  1918.  These  totuLs 
were  taken  from  Volume  I  of  the  comptroller's  report,  which  does 
not  indicate  what  States  were  included,  Volume  II,  which  would  give 
this  information,  not  having  been  printed  at  date  of  this  writing.  It 
is  probable  that  the  real  estate  loans  reported  in  1918  were  for  the 
same  banks  in  the  same  States  as  for  1917  with  one  exception.  That 
exception  is  in  the  case  of  stock  savings  banks,  for  the  comptroller's 
report  shows  a  decrease  from  $387,000,000  in  1917  to  S26,000,000  in 

1918.  Such  a  large  apparent  decrease  indicates  that  California, 
which  reported  $361,000,000  of  real  estate  loans  of  stock  savings 
banks  in  1917  must  have  been  dropped  from  the  comptroller's  report 
in  1918.  In  the  case  of  other  classes  of  banks  there  ma}'  also  have 
been  States  omitted  in  1918  which  were  not  omitted  in  1917;  but  this 
is  not  very  likely  to  have  been  the  case. 

It  has  already  been  noted  that  the  real  estate  loans  held  in  1013 
by  banks  in  those  States  which  are  included  in  the  comptrollers  1917 
report  amount  to  only  83  per  cent  of  the  real  estate  loans  held  by  all 
banks  reported  in  1913.  The  figure  in  column  7  was  reached  by  the 
assumption  that  the  total  amount  of  real  estate  loans  reported  by 
the  comptroller  in  1917  amounted  to  the  same  percentage  of  total 
real  estate  loans  held  by  banks  in  that  year. 

The  figure  in  column  8  is  reached  by  the  assumption  that  the 
comptroller's  report  in  1918  reported  83  per  cent  of  all  real  estate 
loans  held  by  banks.  In  view  of  the  fact  already  pointed  out  in  regard 
to  stock  savings  banks  that  the  comptroller  did  not  report  all  the 
banks  in  1918  that  were  reported  in  1917,  the  total  amount  shown  in 
column  8  is  probably  too  low. 

To  summarize  what  has  been  said  in  detail  above: 

The  comptroller's  report  in  1917  reported  real  estate  loans  by  dif- 
ferent classes  of  banks  in  only  part  of  the  States.  In  these  sain-' 
States  in  1913  he  reports  real  estate  loans  for  the  different  classes  o: 
banks  amounting  to  only  83  per  cent  of  the  real  estate  loans  reported 
for  all  banks  in  all  States  that  year.  Assuming  that  the  real  estate 
loans  reported  in  1917  were  only  S3  per  cent  of  all  real  estate  loana 


ECOXOMICS   OF   THE   CONSTRUCTION   INDUSTRY.  219 

held  b}'  banks  in  that  3'ear,  we  arrive  at  the  total  amount  of  real 
estate  loans  heW  by  banks  in  1917,  $4,430,000,000. 

On  the  same  assumption  that  the  comptroller  in  1913  reported  83 
per  cent  of  the  real  estate  loans  held  by  different  classes  of  banks  in 
all  States,  we  arrive  at  the  figure  $3,780,000,000  of  real  estate  loans 
held  ny  all  banks  in  1918. 

There  is  reason  for  tliinking,  however,  that  the  real  estate  loans 
reported  in  1918  represent  less  than  83  per  cent  of  all  real  estate 
loans  and  that  the  actual  amount  of  real  estate  loans  held  by  banks 
in  1918  probably  amounted  to  $4,100,000,000. 

Increase  in  combined  real  estate  loans  of  banks,  insurance  companies, 
and  building  and  loan  associations,  1913-1918. 

Table  87  gives  the  real  estate  loans  of  banks,  trust  companies, 
and  insurance  companies  and  the  total  assets  of  building  and  loan 
associations  in  the  United  States  for  1913,  1917,  and  1918.  In  this 
table  the  results  reached  in  Table  8G  were  utilized  except  for  the  year 
1918.  For  1918  the  figure  $4,100,000,000  w^as  taken  as  representing 
the  total  real  estate  loans  held  by  banlvs  and  trust  companies.  Tliis 
figure  is  $320,000,000  larger  than  the  figure  reached  on  the  assump- 
tion that  the  comptroller  reported  S3  per  cent  of  all  real  estate 
loans  held.  This  increase  in  the  estimate  is  justified  by  the  apparent 
fact  that  the  California  stock  savings  banks  with  real  estate  loans  of 
8361,000,000  in  1917  were  not  included  in  the  1918  report  of  the 
comptroller. 

The  figures  for  insurance  companies  were  taken  from  the  Insm'ance 
Yearbook,  published  by  the  Spectator  Co.,  and  represent  the  amount 
of  real  estate  loans  held  by  insurance  companies  on  January  1  of  the 
years  1913,  1917,  and  1918. 

Tlie  statistics  for  building  and  loan  associations  were  taken  from 
the  Proceedings  of  the  Annual  Convention  of  the  I'nited  States 
League  of  Local  Building  and  Loan  Associations  and  represent  the 
total  assets  of  these  institutions  on  January  1,  1913,  1917,  and  1918. 

By  adding  the  loans  of  banks  and  insurance  companies  to  the  total 
assets  of  the  building  and  loan  associations,  practically  all  of  which 
represent  real  estate  loans,  a  grand  total  in  round  num])ers  was 
reached  of  $6,170,000,000  in  1913,  $7,921,000,000  in  1917.  and 
$7,890,000,000  in  1918. 

These  figures  show  an  increase  in  real  estate  loans  held  by  these 
institutions  of  $1,751,000,000  in  1917  over  the  amount  lu-ld  in  1013, 
and  an  increase  of  $1,720,000,000  in  1918  over  the  figure  for  1913. 
This  represents  an  increase  in  both  1917  and  1918  of  approximately 
28  per  cent  over  the  figure  for  1913. 


220 


ECONOMICS   OF   THE   CONSTRUCTION   INDUSTRY. 


Tabi.k  87. — Real  estate  loaaa  of  banks,  trust  companies,  and  insurance  companies  and 
total  assets  of  building  and  loan  associations  in  the  United  States. 


Hanks  and  trust  companies,  .Time  30 

Insurancf"  lompanies,  Jan.  1 

£uiIdLug  uud  loan  association  a^^sets,  Jan.  1 

r.rand  total 

Increase  over  19i:i 

Increase  over  19i:j per  cent. 


1913 


$3,  .547, 695, 105 
1,4&5, 108,814 
1,137,600,648 

6,170,404,567 


$-l,t.'50, 266,151 
1,892,607,910 
1,. 598, 62.^1. '56 

7,921,-502,203 

1,751,097,636 

28 


$4,100,000,000 
2,020,873,063 
1,769,142,175 

7,890,015,838 

1,719,611,271 

2% 


Sources:  Bank  and  trust  company  statistics  derived  from  the  comptroller's  report;  iasorance  statistics 
from  Insuranc-e  Yoarl)ook,  published  by  the  Spectator  Co.;  building  and  loan  statistics  from  Proceedings 
of  Annual  Convention  of  the  United  States  League  of  Local  Building  and  Loan  Associations. 

Increase  of  real  estate  loans  compared  with  various  indices  of  national 
expansion. 

It  is  interestiug  to  compare  tlie  increase  in  real  estate  loans  held 
by  the  chief  lendmg  institutions  ■with  various  indices  of  national 
expansion  as  shown  m  Table  88. 

Table  8S. — Increase  in  the  real  estate  loans  as  compared  v:ith  various  indices  of  national 

erpans-ion. 

[In  millions  of  dollars.] 


Amount 
in  1913. 

Amount 
in  191S. 

Pcrcent- 
aj-'c  i  u- 
crpase 
from 
1913  to 
1018. 

Combhied  real  estate  loans  of  hanks,  insurance  companies,  and  build- 

6,171 
3,548 
4,513 
14, 657 
17,476 
7,362 
34,500 

6.  ax) 

7.890 

4,100 

5,850 

22, 575 

27,808 

12,362 

45,000 

(1917) 

1>.,000 

P(TC(nt. 

as 

16 

Bank  loans  secuied  hy  collateral  other  than  real  estate 

30 

54 

59 

68 

Dr  Friday's  estimate  of  iiatioiialiucome  of  the  United  States... 

30 

Dr.  Friday's  estimate  of  savings  in  the  X'nited  States 

200 

It  shoidd  be  noted  in  the  table  that  the  combined  real  estate 
loans  of  banks  and  insurance  companies  and  building  and  loan 
associations  increased  only  28  per  cent  in  five  years,  and  bank 
loans  secured  by  real  estate  mcreased  only  16  per  cent.  During  the 
same  period  bank  loans  secnred  by  collateral  other  than  real  estate 
increased  30  per  cent.  Total  loans  and  discounts  of  banks  in  the 
United  States  increased  54  per  cent.  Individual  bank  deposits  in 
the  United  States  increased  69  per  cent,  stocks  and  bonds  owned 
by  banks  and  msurance  companies  increased  68  per  cent,  and  sav- 
ings ill  the  United  States  are  estimated  to  have  increased  200  i>er 
cent. 


ECOXOMICS    OF   THE    CONSTRUCTION    INDUSTRY. 


221 


Real  estate  loans  of  banks  compared  with  their  total  resources. 

The  fact  that  real  estate  loans  of  banks  in  the  United  States  have 
not  kept  i^ace  with  the  total  resources  of  banks  is  sliown  clearly  in 
Table  89. 

Table  89. — Real  estate  loans  of  hanks  compared  v.ith  their  total  resources  in  1913.  1917, 

and  19  IS. 

(In  millions  of  dollars.] 


Total 
resources. 

Real  estate 
loans  in- 
cluding 
mortpases 
owned. 

Per  cent 
real  estate 
loans  com- 
prised of 
total  re- 
sources. 

1913 

25, 712 
37,126 
40, 726 

3, 548 
4.430 
4,100 

13.9 

1917 

11.9 

191S 

10.1 

The  foregoing  statistics  are  from  the  annual  reports  of  the  Comp- 
troller of  the  Currency  for  the  years  1913,  1917,  and  1918.  The 
ilgui'es  for  real  estate  loans  as  given  by  the  comptroller  were  modified 
for  reasons  already  explained  in  this  chapter.  The  figures  actually 
given  for  real  estate  loans  by  banks  in  the  comptroller's  reports 
were  $3,677,000,000  in  1917  and  $3,138,000,000  in  1918. 

It  will  be  noted  that  Table  89  shows  real  estate  loans  by  banks  com- 
prised 13.9  per  cent  of  their  total  resources  m  1913;  11.9  per  cent 
in  1917,  and  10.1  per  cent  in  1918,  If  the  figures  given  hi  the  comp- 
troller's reports  for  1917  and  1918  had  been  taken  the  percentage 
of  those  3"ears  would  have  been  considerabh'  lower.  If  the  real 
estate  loans  of  banks  in  the  United  States  had  mcreased  from  1913 
to  1918  m  proportion  to  the  total  resources  of  the  banks  tlicy  would 
have  amounted  in  1918  to  $5,620,000,000,  or  $1,520,000,000  more 
than  in  the  estimate  above  and  $2,482,000,000  more  than  the  figure 
given  in  the  Comptroller's  Annual  Report  for  1918. 

Resources  of  savings  banks,  insurance  companies,  and  building  and 
loan  associations  compared  with  resources  of  banks  other  than  savings 
banks. 

The  total  resources  of  mutual  savings  banks,  insurance  companies, 
and  buildmg  and  loan  associations,  wliich  are  the  principal  source 
of  real  estate  loans  in  the  United  States,  have  increased  much  less 
rapidly  than  the  total  resources  of  banks  other  than  savings  banks, 
as  shown  m  Table  90. 


222 


ECONOMICS   OF   Ttii:   CONSTRUCTION   INDUSTRY. 


Tahi.k  00.-  7'ol(il  nnourrrs  of  nnitnal  aaviruia  bfinl.t,  innnrance  comftanici^  an-d  ImiJd- 
irifi  and  loan  ussocintions  compared  ivHh  the  loUd.  resources  of  banks  oUicr  Utcni  itivlval 
sdoinijs  banks  in  the  United  Stales. 

[In  miUions  of  dollars.!^ 


191S 


Increase. 


SaviiiKK  banks,  June  30 

Insiuaiicc  companies,  .Ian.  1 

Building;  and  loan  a-s,sociations,  Jan.  1 

All  banks,  other  than  mutual  .savings  banks,  June  30 


4,«>19 

5,941 

1,709 

35,907 


Prrcfnf. 
17 
35 
56 
66 


Tt  will  be  noted  in  Table  90  that  the  resources  of  savings  banks 
increased  only  17  per  cent  from  1913  to  1018,  whereas  the  resources 
of  all  other  banks  combined  mcreased  66  per  cent.  Insurance 
companies  did  better  than  savings  banks,  but  the  relative  increase 
was  but  little  more  than  half  as  great  as  that  of  banks  other  than 
savhigs  banks.  Building  and  loan  associations,  howcA^er,  increased 
in  resources  almost  in  proportion  to  the  banks,  but  their  total  re- 
sources, as  wOl  be  noted,  are  much  smaller  tlian  the  resources  of 
savmgs  banks  and  insurance  companies. 

Real  estate  loans  of  New  York  banking  institutions. 

The  conclusions  reached  from  a  study  of  the  banking  statistics  of 
the  United  States  as  a  whole  may  be  confirmed  by  a  study  of  the 
banking  statistics  of  the  State  of  New  York.  The  problem  of  sta- 
tistics that  are  not  comparable  for  different  3'ears  does  not  arise  in 
the  study  of  banking  statistics  for  this  one  State.  New  York  banks, 
exclusive  of  national  banks  in  New  York,  hold  nearly  one-sixth  of  all 
the  banking  resources  of  the  country. 

Tables  91,  92,  and  93  are  based  on  the  New  York  State  Bank 
Reports.  Table  94  is  from  the  annual  reports  of  the  Comptroller  of 
the  Currenc}'.  From  these  four  tables  relating  to  New  Yoik  banks 
the  following  facts  ma}'  be  noted:  In  1917  there  were  reported  in  the 
report  of  banks  of  deposit  and  discount  and  private  banks  of  New 
York  880  financial  institutions.  These  institutions  had  resources  in 
the  aggregate  of  $6,410,016,000.  This  did  not  include  the  resources 
of  the  national  1>anks  which  do  not  report  to  the  State  banking 
department. 

The  most  important  classes  of  financial  institutions  in  New  York 
are  State  banks,  savings  banks,  trust  com})anies,  private  banks,  in- 
vestment companies,  and  savings  and  loan  associations.  These  were 
the  only  groups  reported  in  the  New  York  banking  reports  in  1917, 
which  held  in  the  aggregate  resources  in  excess  of  §10,000,000.  Sav- 
ings banks,  trust  companies,  and  State  banks  held  about  97  per 
cent  of  the  total  resources  of  financial  institutions  reportmg  to  the 
State. 


EC02^rOMICS   OF   THE   COXSTRUCTIOX   IXDUSTKY.  223 

From  (he  New  York  banking  reports,  as  showji  in  Table  93,  it 
aj^pears  that  the  mortgages  owned  by  trust  companies  increased  3 
per  cent  from  1914  to  1917,  and  that  the  loans  and  discounts  secured 
b\'  real  estate  collateral  held  ])y  trust  companies  increased  2  per  cent 
from  1914  to  1917.  During  the  same  period  loans  and  discounts 
secured  b}^  other  collateral  held  l)y  the  trust  companies  of  New  York 
increased  55  per  cent.  Loans  and  discounts  and  bills  })urchased,  not 
secured  by  collateral,  inci-eased  166  j)er  cent.  Stock  and  bond  in- 
vestments increased  88  per  cent,  and  the  total  resources  of  the  New 
York  trust  companies  increased  84  per  cent.  It  should  be  mentioned 
that  the  mortgages  owned  by  trust  companies  in  1917  amount  to 
894,000,000  as  against  loans  and  discounts  secured  by  real  estate, 
collateral  amounting  to  S14,000,000. 

In  the  case  of  State  banks,  mortgages  owned  increased  from  vSep- 
tember,  1914,  to  September,  1917,  26  per  cent,  and  loans  and  dis- 
counts secured  by  real  estate  collateral  decreased  16  per  cent.  If 
the  two  figures  are  combined  the  increase  is  4  per  cent.  Mortgages 
o\\^ied  b}'  State  banks  in  1917  amounted  to  814,000,000  and  loans 
and  discounts  secured  by  real  estate  collateral  to  $10,000,000.  As 
against  the  increase  of  4  j)er  cent  from  1914  to  1917  in  the  amount  of 
mortgages  owned  and  loans  and  discounts  secured  by  real  estate 
collateral,  the  loans  and  discounts  of  State  banks  secured  by  other 
collateral  increased  21  per  cent.  Loans  and  discounts  and  bills  pur- 
chased not  secured  by  collateral  increased  13  per  cent.  Pubhc  se- 
curities owned  by  State  banks  increased  282  per  cent,  private  securi- 
ties 55  per  cent,  and  total  resources  36  per  cent.  The  conclusion  to 
be  drawTi  from  these  statistics  is  that  real  estate  loans  by  banks  and 
trust  companies  in  the  State  of  New  York  have  not  increased  in  recent 
years  in  proportion  to  other  assets  of  these  institutions. 

Table  94  gives  real  estate  loans  and  total  loans  and  discounts,  total 
investments,  and  total  resources  of  State  banks,  mutual  savings  banks, 
private  banks,  and  trust  companies  for  each  year  from  1914  to  1917. 
It  also  shows  the  total  increase  in  percentage  in  the  various  assets  of 
the  different  classes  of  banks  included,  and  the  percentage  of  the  total 
assets  of  the  kinds  included  in  the  total  held  by  each  class  of  banks. 
It  may  be  noted  in  this  total  that  mutual  savings  banks  in  1914  held 
89.3  per  cent  and  in  1917  89.1  per  cent  of  all  the  real  estate  loans 
held  by  these  four  classes  of  banks.  Trust  companies  held  most  of 
the  remainder,  9  per  cent  in  1914  and  8.9  per  cent  in  1917. 

From  1914  to  1917,  the  table  shows  that  State  banks  increased 
their  real  estate  loans  38  per  cent,  mutual  savings  banks  11  i)cr  cent, 
trust  companies  12  per  cent,  and  that  the  total  real  estate- loans  shown 
by  the  four  classes  of  institutions  increased  11  per  cent.  (It  may  bo 
noted,  at  this  point,  that  the  increase  in  real  estate  loans  shown  for 


224 


ECONOMICS   OF   THE    CONSTIIUCTIOX    INDUSTRY. 


tho  State  banks  is  much  larger  tlian  the  increase  shown  for  these 
banks  in  the  table  based  on  New  York  State  banking  statistics.) 

Table  91. — Number  of  financ'ud  i institutions  of  different  classes  in   Xen:    Yorh  State, 

VJ14-1017. 


1914 


1915 


1916 


1917 


Tianks  of  dopasit,  and  discounts  (State  banks) . 

Siivings  hanks 

Trnst  companies 

I'rivato  bank,-; , 

iSafc-tioposit  companjos 

Invest meni  companies 

.Security  companies 

Savings  and  loan  associations 

Build  inf£  lot  associations 

Land  Bank  of  New  York 

Credit  unions , 

Personal  loan  companies 

Personal  loan  brokers 


107 
140 
81 


47 

10 

2 

241 

1 


200 

140 

81 

75 

46 

11 

2 

245 

1 


202 

141 

89 

76 

47 

12 

2 

251 

1 

1 

14 
19 
2 


212 

141 

90 

80 

48 

17 

2 

152 

1 

1 

14 

19 

2 


Source:  Report  on  Banks  of  Discount  and  I'rivatc  Bankers,  Xew  York,  1914-1917. 

T.^BLE  92. — Resources  of  different  classes  of  financial  institutions  of  New  York  State 

191 4-1917. 

[In  thousands  of  dollars.] 


Banks  of  deposit  and  discount  (State  banks) . 

Savings  banks 

Trust  companies 

Private  banks 

Safe-deposit  companies 

Investment  companies 

Sesurity  companies 

Saving  and  loan  associations 

Builduit;  lot  associations 

Land  Bank  of  New  York 

Credit  unions 

Personal  loan  companies 

Personal  loan  brokers 


658,768 
1,912,0^1 
1,714,954 


8,905 
18.502 

2. 174 

04,250 

27 


091 


671,142 

930,  .596 

153,537 

14,094 

8,855 

19,061 

2,184 

08,476 

27 


10 


4,380,418       4,871,205       5,841,505 


840,704 

2, 053, 172 

2, 026, 431 

15,078 

8.913 

21,590 

2,  ISO 

72,420 

27 

152 

08 

812 

12 


933,437 

2,172,916 

3, 164, 170 

15,505 

8,901 

32,624 

2,190 

79,630 

7 

476 

212 

993 

15 


6,410,016 


Source:  Report  on  Baaks  of  Discoimt  and  I'rivate  Bankers,  New  York,  1914-1917. 


ECOXOMICS    OF    THE    COXSTRUCTIOX    IXDUSTEY. 


225 


Table  93. — Real  estate  loans  and  oilier  assets  of  trust  companies  and  State  banks  of  New 

York  State. 

[In  millions  of  dollars.] 


1914, 

191.5, 

1916, 

1917, 

Sept. 

Sept. 

Sept. 

Sept. 

81 

81 

89 

99 

91.5 

90.5 

91.5 

94.1 

13.9 

14.2 

15.4 

11.2 

,5.s2. 0 

083.4 

927.7 

901.0 

191.2 

210.9 

324.5 

509.0 

4.57.8 

497.0 

5S2.8 

860.7 

1.715.0 

2,155.5 

2,026.4 

3,164.1 

197 

200 

202 

212 

11.1 

11.7 

13.2 

11.0 

12.0 

11.3 

10.7 

10.1 

140.3 

100.0 

175.8 

169.5 

222.5 

203.0 

220.4 

2.50.7 

25.7 

18.9 

24.2 

98.2 

(11.7 

75.2 

102.9 

95.5 

085.8 

671.1 

840.7 

952.4 

Per  cent 
increase, 
1914-1917. 


TPUST  COMPANIES. 

Number  of  companies 

Mortgages  owned 

Loans  and  discount.^ secured  by  real  estate  collateral. . . 

I^oans  and  discounts  secured  by  other  collateral 

Loans  and  discounts  and  bills  purchased  not  secured  by 

collateral ". 

Stock  and  bond  investments 

Total  resources 

STATE  BANKS. 

Nmnber  of  banks 

Mortgages  o^\^led 

Loans  and  discounts  secured  by  real  estate  collateral. . . 

Loans  and  discountssecured  by  other  collateral 

Loans  and  discounts  and  bills  ptirehased  not  secured  by 

collateral 

Stock  and  bond  investment  public  securities 

Private  securities 

Total  resources 


3 
2 
55 

166 
»i 
84 


26 

a  16 

21 

13 
282 
55 
36 


a  Decrease. 
?ourcc:  P.oport  on  Banks  of  Discount  and  Private  Banks,  Xew  York,  1914-1917. 

Table  94. — Real  estate  loans  and  other  assets  of  banhs  and  trust  companies  in  New  York 

State,   1914-1917. 


[In  thousands  of  dollars.] 


1914 

1915 

1910 

1917 

Total 
increa.se, 
1914-1917. 

Per 
cent  of 
total  iu 
1914,  by 
cl;is.ses 
of  banks. 

Per 
cent  of 
totaliii 
1917,  by 
classes 
of  banks. 

Real  estate  loans: 

State  banks 

17,751 

1,007,754 

1,675 

100, 700 

21,022 

1,008,414 

1,8.S4 

104, 534 

23.790 

1,059;  403 

1,090 

107, 707 

24, 456 
1, 113, 895 

Ft  r  mil. 
33 
11 

1.6             2.0 

Mutual  s;xvings  banks 

89. 3 

.1 

9.0 

83.1 

Tvii.^^t-  nfimp,-|nir>s     ^ 

112,264 

12 

8.9 

1,127,880 

375, 700 

1,010,374 

4,299 

&S8, 700 

1,13.5,854 

375. 243 

1.02(;;902 

3,927 

959,919 

1,191,990 

407,529 

1, 059, 570 

2,040 

1,374,775 

1,250,614 

462, 697 

1,139,518 

2,289 

1,658,155 

11 

24 

12 

a  48 

87 

Total  loans  and  discoimts: 
State  banks 

16.5 

44.3 

.2 

39.0 

14.2 

Mutual  savings  banks 

Private  banks 

35.0 

eo.i 

Trust  companies 

50.7 

Total    loans    and    dis- 

2,279,1.39 

S1,(W2 

761, 105 

7,  510 

433, 829 

2,365,991 

92. 250 

761,093 

5,7S2 

478, 628 

2, 843, 914 

127,345 

793, 517 

4,332 

593, 330 

3, 262, 559 

145,974 

&i5,722 

4, 5.58 

603, 4(.V} 

43 

79 
11 

"  40 
10 

Investments: 

State  banks 

6.4 

59.  4 

.6 

33.6 

9.1 

Mutual  savings  banks 

Private  banks 

52.9 
.3 

Trust  companies 

37. 7 

Total  investments 

Total  resources; 

State  banks 

1,284,076 

091,668 

1, 933. 803 

23',  393 

1,818,194 

l,338,f03 

701, 9.52 

1, 955, 962 

18.099 

2, 02.5,  .509 

1,516,524 

818,384 

2,a5.3,172 

14,044 

2,  620,  8,58 

1,599,718 

898, 586 

2,172.918 

15.019 

2.941.291 

25 

30 
12 
35 
(3 

1.5.5 

43.3 

.5 

40.7 

14.9 

Mutual  savings  banks 

Private  banks 

Trust  companies 

36.0 

.2 

4,0.9 

™      , 

4,467,0.58 

4,801,522 

5, 512, 468 

6,027,812 

35 

' 

1 

Source:  Amiuil  Roiwrts  of  the 
121297°— 19 15 


a  Pecrea.'=e. 
("oniptroller  of  the  Currency,  1914-1917. 


226 


ECONOMICS   OF   THE    (JONSTltUCTIOX    INDUSTUVT. 


T.vBi.io  95. — Real  eslalc  Inans  anr]  total  ousels  of  Xnr  Yorl:  iSlate  Jinancidl  {nslitiditma, 

1914-lOh. 


Jun.  1,  1011. 

Banks 

Trust  compiinie.'- 

Savings  liaiiks 

Private  bankers 

Sul'e-dcposit  companies 

Investment  corapauios 

Savings  and  loan  ai>soi'iation^ 


Mortgages  o\meil 

and  loan.s  on 

real  ostalc 

coHateral. 


$17, 701,  S.51 
107,470,322 
983,790,702 


Total. 


Jan.  1,  lOl," 

Banks 

Trust  companies. 

Savings  banks 

Private  Viankers 

Safe-depo.sit  companies 

Investment  companies 

Savings  and  loan  associations 


Total. 


.Tan.  1,  191G. 

Banks 

Trust  companies 

Savings  banks 

Private  bankers 

Safe-deposi  t  companies 

Investment  companies 

Sa\lngs  and  loan  associations 

Land  bank 


Total. 


Jan.  1,  1917 

Banks 

Trust  companies 

Savings  banks 

T'rivate  bankers 

Safe-deposit  companies 

Investment  companies 

Savings  and  loan  a^^iociations 

Land  bank 


Total. 


Jan.  1,  1918. 

Banks 

Trust  companies 

Savings  banks 

Pri\-aie  bankers 

Safe-deposit  (H)ni  panics 

Investment  companies 

Sa\'ings  and  loan  as?ociat  ions 

Land  bank 


Total. 


Jan.  1,  1919. 

Banks 

Trust  companies 

Savings  banks 

Private  bankers 

Sale-deposit  companies 

Investment  companies 

Saxings  and  loaa  a.ssoeiations 

Land  banks 


Total. 


137, 5A) 
1."),  770, 1*8 
57, 0r)2,  tot 


1, 189,  SS7,  r>S9 


23,7Cl..r>30 

108, 103;  04<^; 

1,017,493,972 

l,71.5,94o 

141,  (.CiO 

1.5, 079, 2.54 

01,119,001 


1,228,014,348 


23,330,370 

104,. 338, 829 

1,043,-325,012 

1,435,524 

■  272, 250 

1-5,044,032 

W,  440, 907 

102, 250 


Total  a.ssets. 


$625. 80t\  406 
l,574,<w6,207 
1,920,:«4,-331 


1,2-52.889,174 


23, 746, 556 

100,048,728 

1,091,549,464 

1,277,1.77 

203,025 

1.5,305,724 

70, 400, 200 

379, 725 


1, 309, 702, 705 


24,083,905 

108,341,088 

1,114, 120. 585 

653,405 

277. 190 

15, 985, 534 

75. 580. 810 

704.675 


1, 339, 756, 192 


22,619,909 

ia5,  ISO.  9}8 

1.104,0(S.Sl'5 

653.7f>ii 

296-035 

13.887.124 

70. 427.  790 

631.875 


8,9(>1,.5S3 
18.-501,054 
W,  249, 990 


Peropnt«i« 

oltoiil 

a.Hset3 

loaned  on 

real  estate 

security. 


.3.  T2 
0.'i2 
51.. iS 


1.3-23,772.408 


4,  218,  573, 171 


048,234,301 
1,740,-598,437 
1,912,204,573 
18,402,092 
8,8-5-5,201 
19,fiCl,233 
OS,  170, 499 


4,41<vl92,4-5.i 


79-3, 425,  ■SS4 

2,  532,  -^92,  "SO 

1.974,040,375 

■    14.n0,5"<5 

8, 912,  tHKi 

21  •"*9.  870 

72^  419!  fi58 

151 ; 777 


5,417,-5.52,517 


901.845,248 

2,744,317,081 

2,139,299.037 

10,070.993 

8, 900,  -505 

32,024,312 

79, 029.  881 

47.5, 570 


5, 923, 1C2, 627 


932,437.232 

3.164.170,014 

2.105,939,081 

15,505,206 

9, 855.  .540 

55,079,104 

80,072.8-29 

757,  f«2 


0. 429. 816.  ^♦44 


1,020,241.730 

3,221,371.809 

2,231,461.928 

19,670,50:5 

10,  40ii.  $^,2 

a5, 400. 400 

89,017,871 

(■in.  002 


«i.  6S8. 238, 235 


1.  .'3 
«8. 71 


3.66 

0.  :i 

S.i.  21 
9.2* 

1.  .50 
79.74 
«?.  24 


4.11 
52.  A 
10.  IT 

3.05 
72.  J<. 
8S.  M 
07- r.  7 


3.  «S 
51.02 
7.95 
S.01 

47. 0"." 
88.  »■.» 
79.S.-i 


%>.  42 
51-43 
4-21 
2.81 
2!>-02 
87. 8! 

0->  Q7 


2.21 

'.;.  jt 

4-'.  47 
3.  .■2 
2. 84 

14.  .5.'^ 

94  01 


NOTE. — While  all  the  in.-<titiitions  subject  to  the  supervision  of  Hie  New  i  ork  banking  department 
ot  roiiort  as  of  January  1,  tlie  reports  nearest  that  date  have  been  taken  for  purp^>se«  of  tabulatioii. 


ECONOMICS   OV   THE    COXSTRUC'TIOK    INDUSTRY.  2 '2  7 

As  against  an  increase  of  11  per  cent  in  the  real  estate  loans  of 
those  four  classes  of  banks  from  1914  to  1917,  their  total  loans  and 
discounts  increased  43  per  cent;  their  total  investments,  25  per  cent, 
and  their  total  resources,  35  per  cent. 

A  point  of  prime  importance  is  that  New  York  savings  banks,  the 
main  source  of  real  estate  loans,  increased  much  less  rapidly  in  re- 
sources than  trust  companies  and  State  banks.  Whereas  the 
resources  of  savings  banks  increased  onl}'^  12  per  cent  from  1914  to 
1917,  the  resources  of  State  banks  increased  30  per  cent  and  trust 
companies  63  per  cent.  (Aii  even  greater  increase  is  shown  in  the 
statistics  from  the  State  banking  department,  in  the  case  of  State 
banking  companies,  36  per  cent,  and  in  the  case  of  trust  companies, 
84  per  cent.) 

In  1914  the  resources  of  savings  banks  comprised  43.3  per  cent  of 
the  total  resources  of  the  State  banks,  trust  companies,  private  banks 
and  mutual  savings  banks,  whereas  the  resources  of  trust  companies 
comprised  only  10.7  per  cent,  but  in  1917  the  percentage  was  36  per 
cent  for  savings  banks  and  46.9  per  cent  for  trust  companies. 

Table  95  shows  the  real  estate  loans  of  all  classes  of  New  York 
banking  institutions  as  compared  with  their  total  resources  from  1914 
to  1919.  It  shows  the  general  tendency  for  the  percentage  of  total 
resources  invested  in  real  estate  loans  to  diminish  from  year  to  year. 

Developments  during  1917  and  1918. 

As  has  been  pointed  out,  real  estate  loans  of  the  chief  lending 
institutions  have  not  kept  pace  in  the  last  five  years  with  the  expan- 
sion of  the  country  in  general.  Durmg  1917  and  1918  real  estate 
loans  appear  not  only  not  to  have  increased  in  proportion  to  the 
general  growth  of  the  country  but  to  have  actually  decreased  in 
amount,  particularly  during  the  latter  part  of  this  two-year  period. 
The  replies  to  questionnaires  received  from  ten  important  savings 
banks  in  the  New  England  States,  Pennsylvania,  New  York,  Mary- 
land, and  Minnesota  sliow  real  estate  loans  in  December,  1916,  of 
$131,591,000;  in  November,  1918,  $132,661,000;  and  in  February. 
1919,  $131,710,000.  The  increases  from  December,  1916,  to  Novem- 
ber, 1918,  amounted  to  0.8  per  cent  and  from  December,  1916,  to 
February  1,  1919,  to  0.09  per  cent;  that  is  to  say,  the  decrease  from 
November  1,  1918,  to  February  1,  1919,  almost  equaled  the  increase 
from  December  31,  1916,  to  November  1,  1918. 

Returns  from  the  State  banking  departments  of  Ohio,  Misstuui, 
and  New  York  for  1918  have  been  received.  The  Ohio  report  shows 
the  following  facts  in  regard  to  real  estate  loans  of  banks : 

The  total  of  loans  and  discounts  (on  Dec.  31,  1918)  was  $54.3,041,830,  :in  inrreaso  of 
$15,003,029  since  August  31,  1918,  and  an  increase  as  compaicd  with  Decoml^cr,  192  7, 
of  SI  1,214,960.  Loans  on  real  e.-tate  were  reported  at  $195,849,270,  or  a  further  decline 
in  such  loans  of  $3,512,782  since  August  31,  1918.     The  percentage  of  loans  and  did- 


228  ECONOMICS   OF   THE   CONSTRUCTION    INDUSTRY. 

counts  to  total  deposits  in  Rtato  banks  Deoembor  ."11  [191S],  was  03.28  as  compart-d  with 
G1.37  August  31  [lOlS],  and  G2.42  Bfccmber  31,  1917.  The  proportion  of  loana  on 
real  estate  to  capital,  surplu.'<,  and  total  depo-sita  December  31  [191S],  was  20.45  i)er  cent 
as  compared  with  21.10  per  cent  on  August  31  [1918],  and  22.17  per  cent  as  compared 
with  December  31,  a  year  ago.  The  decline  in  real  estate  loans  during  the  year  was 
approximately  $11,500,000. 

The  1018  report  of  the  Bunk  Commissioner  <»f  Missouri  shows  that 
tlie  real  estate  loans  held  by  the  bank  and  trust  companies  of  ^lissouri 
amounted  to  $70,262,000  on  November  4,  1918,  as  against  $75,222,000 
on  NoYeml)er  20,  1917,  a  decrease  of  almost  $5,000,000.  During  the 
same  period  '  the  total  resources  of  these  banks  increased  from 
$667,546,000  to  $761,992,000. 

The  reader  is  referred  to  Table  95  for  a  comparison  of  real  estate 
loans  of  New  York  banking  institutions  on  January  1,  1918,  and 
January  1,  1919.     A  considerable  decrease  is  sho"\\Ti. 

FACTORS  TENDING  TO  RESTRICT  THE  SUPPLY  OF  CAPITAL  AVAILABLE 
FOR  INVESTMENT  IN  BLTLDING  ENTERPRISES  AND  PERMANTJNT 
MORTGAGE  LOANS. 

Introduction. 

It  is  a  difficult  matter  to  weigh  accurately  each  of  the  separate 
causes  which  since  1914  hare  contributed  to  the  changed  conditions 
in  the  supply  of  real  estate  loans.  Among  the  temporary  causes 
have  been  the  issue  of  Liberty  bonds  and  the  financial  restrictions 
on  nonessential  construction;  in  fact,  all  the  various  modifications 
of  control  over  manufactm-ing,  transportation,  banking  and  invest- 
ment. The  permanent  causes  tending  to  prevent  expansion  of  out- 
standing mortgages  include  lack  of  standard  methods  of  issue,  lack 
of  marketability,  and  changes  in  the  bankmg  system  which  have  led 
the  flow  of  banking  resources  into  the  chamiels  of  conunerce  and  even 
of  speculation  and  away  from  real  estate  mvestments.  In  the  firet 
instance,  as  the  Government  increased  its  borrowings  and  the  banking 
system  gamed  control  of  financial  resources,  investment  funds  were 
directed  away  from  those  activities  which  normally  required  an 
increasing  amount  of  financial  accommodation.  One  of  the  most 
])rominent  of  these  activities  was  the  buildmg  mdustry.  Then,  too, 
contracts  for  war  equipment  compelled  reallocation  of  labor  and 
materials  until  the  forces  of  production  as  well  as  those  of  banking 
credit,  were  sliifted  from  less  essential  building  activities  to  the  needs 
of  war.  Some  of  these  causes  have  contributed  toward  keeping  down 
the  volmne  of  loans  offered  whde  others  have  operated  toward 
reducing  the  demand  for  loans  by  making  construction  impossible. 


ECOXOMICS    OF   THE    COXSTRUCTIOX    IXDUSTKY.  229 

War  restrictions. 

It  may  be  of  interest  to  enumerate  some  of  tlie  restrictions  that 
were  imposed  to  limit  activities  in  nonessential  lines. 

The  War  Industries  Board  published  regulations  withdrawing 
priority  assistance  from  projects  not  contributing  to  the  processes 
of  war.  The  Railroad  Administration  established  priority  shipment 
orders  carrying  preference  in  supply  and  movement  to  many  com- 
modities and  specifically  excepted  many  other  commodities,  including 
that  portion  of  building  materials  destined  for  nonessential  construc- 
tion. ■  There  was  a  50  per  cent  to  75  per  cent  reduction  in  numbei-s 
of  styles  and  sizes  and  in  quantity  of  production  in  many  lines  of 
manufactured  commodities.  These  no  longer  were  available  ror  build- 
ing. The  War  Industries  Board  published  a  classified  preference 
fist  of  industries  and  plants  to  be  considered  as  war  essentials  and 
thereby  specifically  restricted  normal  activities  in  the  building  indus- 
try. The  Capital  Issues  Committee  of  the  Federal  Reserve  Board 
curtailed  nonessential  credits,  thus  discriminating  against  the  activity 
of  the  title  guaranty  and  mortgage  sellers  of  real  estate  debentures 
and  real  estate  collateral  trust  bonds,  whUe  on  the  other  hand  it 
became  the  duty  of  the  War  Finance  Corporation  to  provide  credit 
facilities  for  the  support  of  war  activities  not  othei-wise  provided  for. 

Lack  of  standardized  methods. 

In  discussmg  the  causes  which  may  further  restrict  an  increase 
in  the  amount  of  capital  available  for  investment  in  budding  loans 
and  mortgages,  it  is  important  to  note  that  real  estate  lending  is  a 
process  of  investment  not  subject  to  standardized  conditions  except 
those  wiiich  obtain  to  a  limited  extent  wdthin  the  markets  reached 
by  the  title  guaranty  and  trust  companies.  This  lack  of  standard 
conditions  in  the  issue  of  most  mortgage  loans  deprives  the  security 
f  a  very  desirable  quality,  know^n  as  marketability. 

The  person  who  invests  in  a  real  estate  loan  is  subject  to  the  incon- 
venience and  expense  of  making  dh'ectly  or  indirectly  a  special  and 
often  costly  investigation  of  the  security  offered,  and  although  the 
investment  may  be  the  most  excellent  security  he  has  no  open  general 
market  on  which  to  sell  and  is  likely  to  have  to  w-ait  for  the  loan  to 
matm-o  before  he  can  recover  liis  capital.  This  is  a  disadvantage 
which  may  tend  to  deflect  the  current  of  available  funds  for  invest- 
ment away  from  real  estate  loans  into  other  channels.  For  example, 
in  the  State  of  New  York  stock  and  bond  investments  of  banks 
increased  25  per  cent  from  1914  to  1917,  while  real  estate  loans  of 
these  banks  mcreased  only  11 1  ])er  cent. 

State  laws  not  to  blame. 

In  this  connection  it  is  frequently  asked,  Are  State  laws  to  blame 
for  reduced  investment  in  mortgage  loans  ?     In  reply  to  this  question, 


2ci0  ECONOMIC-^    OF    Till':    CO-VsTRL'CTIuX    INDUSTRY. 

wc  refer  to  Mr.  Coulter's  reinarks  ])efore  the  Rural  CreiHts  subcom- 
luittee,  wherein  he  stated: 

It  is  a  fact  that  practically  every  Slate  i^ank  ia  the  l.uit-ed  Stares  iiuw  (uuld  legally 
knd  on  real  estate  security.  I  have  got  the  banking  laws  of  cver\-  State  and  hiue 
studied  them  to  see  to  what  extent  the  State  Imnks  and  private  banks  could  lend 
\\-ith  real  estate  as  security,  and  there  is  almost  no  limitation.  But  at  the  same  time 
the  State  banks  and  privates  banks  do  not  lend  to  a  very  largf  extent  on  mortgages, 
because  they  are  in  the  same  system  with  the  national  banking  aesociationfl  and  have 
to  do  the  same  sort  of  business  in  order  to  keep  in  the  same  class  and  gd  thfir  paper 
discounted.  They  imitate  the  national  bank  because  the  national  bank  is  the  stand- 
ard; that  is  the  style;  that  is  the  method  ot  doing  busin'-ss.  They  have  constant 
intercovu^e  with  and  follow  the  lead  of  the  national  lianks. 

Mr.  Coulter  at  that  tune  was  evidently  convinced  by  a  study  of 
the  digests  of  State  banking  laws  that  State  banks  were  allowed  to 
loan  money  on  real  estate  practically"  without  limitation. 

In  addition  the  State  lav.'s  provide  ade(puite  security  for  mortgage 
loans  in  the  event  of  default.  In  this  connection  we  quote  an  excerpt 
from  the  Second  Annual  Report  of  the  Federal  Farm  Loan  Board: 

An  examination  of  the  laws  of  the  several  vStates.  pro^-ided  for  in  the  thirtieth  section 
of  the  act,  to  determine  whether  these  laws  were  such  as  to  assure  the  holder  of  a 
mortgage  adequate  safeguards  against  loss  in  the  event  oi  default  revealed  great  differ- 
ences, but  with  one  exception  (Texas)  failed  to  disclose  any  State  lav,-  which  denied 
adequate  security  to  a  mortgage. 

Real  estate  loans  suffer  from  discrimination  in  rediscounting. 

Having  treated  of  the  changed  conditions  in  the  supply  of  real 
estate  capital,  and  havmg  attributed  these  changes  mainly  to  causes 
connected  with  the  war,  which  have  now  ceased  to  operate,  we  nat- 
urally turn  to  those  other  causes  which  lie  witliin  the  banking  system 
itself.  Here  we  find  a  process  of  rearrangement  tiiat  promises 
eventually  to  bring  about  a  marked  change  in  the  activities  of  the 
banks.  Tliis  opinion  is  baSed  on  the  fact  that  nonmember  banks 
are  becoming  more  and  more  united  in  their  efforts  to  gain  member- 
sliip  in  the  Federal  Reserve  system.  Tu^o  lines  of  activity  are  being 
applied  to  bring  this  about.  One  is  the  educational  campaign  being 
carried  on  by  the  American  Bankere  Association  to  secure  State 
legislation  enabling  State  institutions  to  join  the  Federal  Reserve 
system,  without  firet  haA'ing  to  become  national  banks.  The  other 
line  of  activit}'  is  the  educational  campaign  bemg  conducted  by 
the  United  States  Coimcil  of  State  Banking  Associations  to  interest 
])oth  State  and  National  legislatm'es  and  the  constituent  members 
of  the  association  in  proposed  amendments  pertaining  to  the  operation 
of  the  Federal  Reser^-e  act,  aU  of  which  amendments  are  drawn  with 
a  view  toward  creating  greater  bankmg  uniformity.  For  the  reason 
that  national  banks  will  be  allowed  to  compete  with  State  banks, 
it  will  be  to  the  interest  of  State  banks  that  State  laws  also  shall 
allow  their  local  institutions  a  similar  latitude.     The  net  result  will 


ECONOMICS    OF   THE    C'OXSTRUCTIOX    IXDUSTRY.  231 

be  that  each  separate  institution  eventually  will  bo  able  to  offer  to 
its  customers  all  the  bankins;  sei*viees  that  any  other  banking  iusti- 
tution  conducts.  We  ma}'  look  foi-^^ard  to  the  time  when  each 
bank  gradually  will  approach  a  new  standard  by  developing  a  com- 
plete combination  of  all  banking  sei-vices  until  aU  banking  sei*vices 
win  be  offered  by  ah  banks  and  each  bank  will  be  like  eveiy  other 
bank. 

To  show  to  what  additional  length  it  is  planned  to  carry  this 
reconstruction  process,  we  ciuote.  from  the  Fifth  Annual  Report  of 
the  Federal  Reserve  Board,  a  proposal  to  amend  section  23  of  the  act: 

The  board  has,  on  p>'evioiis  occasions,  recommended  to  Congress  that  the  Federal 
Reserve  act  be  amended  so  as  to  permit  national  banks  under  certain  conditions  to 
establish  branches  not  to  exceed  ten  in  number  ■vdthin  the  corporate  limits  of  the  city 
or  t<Avn  in  'vrhich  it  is  located,  provided  the  State  lavrs  extend  a  similar  pri\-ilege  t<j 
competing  State  corporations.  As  the  law  now  stands  national  banks  are  at  a  serious 
disadvantage  in  meeting  the  competition  of  State  banks  vath  branches.  In  the 
opinion  of  the  board  the  proper  development  of  the  Federal  Reserve  system  makes 
it  necessary  to  coordinate  as  far  as  possible  the  powers  of  all  member  banks.  Under  the 
existing  laws  State  banks  and  trust  companies  in  many  cases  are  permitted  to  operate 
branches  even  after  conversion  into  national  banks  with  the  result  that  some  member 
banks  have  advantages  which  others  do  not  enjoy.  The  board  therefore  renews  its 
recommendation  that  this  amendment  be  adopted,  being  confident  that  it  Avill  prove 
beneficial  to  the  Federal  Reserve  system,  as  well  as  to  the  communities  concerned. 

Now  it  is  argued  that  these  proposed  changes  have  not  affected  and 
will  not  affect  the  amount  of  financial  capital  ordinarily  a\-ailable  ior 
investment  in  real  estate  mortgages  because  eligible  State  banks 
will  join  the  system  only  when  their  busmess  of  deposit  and  discount 
is  of  such  a  nature  and  volume  as  to  benefit  b}'  the  new  facilities. 
Logically,  therefore,  to  other  types  of  banks,  devoting  theii'  attention 
to  real  estate  loans,  membership  would  be  of  slight  advantage. 
These  will  not  join.  Therefore  the  increase  in  number  of  member 
State  banks,  even  if  occuring  at  a  time  of  reduced  investment  in  real 
estate  mortgages,  would  not  necessarily  be  the  cause  of  this  reduction. 
This  view  is  held  for  example  by  C.  S.  McCain,  vice  president  of  the 
Bankers  Trust  Co.,  Little  Rock.  Ark.,  who  A\Tites  as  foUows: 

There  is  no  question  that  the  rediscount  privilege  will  have  a  tendency  to  iiicreaseour 
loans  that  are  available  for  rediscount.  In  this  State  the  liusinoss  of  the  trust  comjia- 
niesis  not  segregated  to  the  extent  it  is  in  the  eastern  or  even  the  middle  Avestern  State.^, 
so  that  we  have  very  broad  powers  under  our  trust  company  charlers  and  do  a  commer- 
cial as  well  as  a  trust  company  business.  I  think,  therefore,  that  the  tendency  will 
be,  rather  than  restricting  the  real  estate  loans,  t*>  tighten  up  ou  our  commercial  loans 
and  see  that  these  ai-e  of  such  chaiucter  that  they  are  available  ft.r  rediscount  and  in 
this  way  avail  ourselves  of  the  rediscount  privilege  Arithout  disposing  of  thr-  piivilpgo 
of  real  estate  mortgage  loans  business  which  we  n<iw  enjoy. 

However,  in  spite  of  all  argmnents  in  support  of  the  poptdarity 
of  mortgage  loan  investments  there  is  much  official  testimony  of  a 
contrudictorv  nature.     Our  own  statistics  show  that  financial  capital 


282  ECOXO.MICS    OF   THE    CONSTRUCTION    INDUSTRY. 

has  ))Ocoino  relatively  loss  available  for  investment  in  temporary 
{)iiilding  loans  and  mortgage  loans.  Mr.  Walter  Stabler,  comptroller 
of  the  Metropolitan  Life,  has  -warned  the  public  that  large  lenders 
Averc  temporarily  out  of  the  market  and  borrowers  would  have  to 
seek  accommodation  elsewhere.  In  1914  Mr.  J.  Lee  Coulter,  testify- 
iiijr  before  the  Rural  Credits  Subcommittee,  said: 

As  an  illustration,  you  \nll  find  by  a  study  of  State  laws  that  State  banks  are  allowed 
to  loan  money  on  real  estate  and  yet  in  all  States  the  practice  is  that  they  have  imi- 
tated the  precedent  of  the  national  banks.  Even  if  yf>u  authorize  them  by  law  to 
do  a  certain  tiling,  .they  know  in  practice  they  must  IoILav  the  general  system  of 
national  banks,  because  they  must  deal  through  national  banks  and  have  finally  to 
turn  to  them;  they  kn(^w  tliat  their  ]>aper  nn  land  is  not  good;  they  are  modeled  after 
the  national  banks  in  their  business  forms  and  business  methods  and  you  can  not 
get  away  from  that. 

As  excellent  an  authority  as  the  Federal  Reserve  Annual  Report 
of  1919  m  reviewing  the  efforts  of  nonmember  banks  to  join  the 
system,  states: 

That  the  entrance  of  mutual  savings  associations  and  stock  sa^-ings  banks  into  the 
Federal  Reserve  system  will  give  an  added  impetus  to  the  movement  for  State  legis- 
lation authorizing  such  associations  and  banks  to  invest  a  larger  proportion  of  their 
?ssets  in  liquid  securities. 

This  same  report  continues: 

If  these  associations  and  banks  are  admitted  tv  membership,  they  will  be  aide  to 
transfer  to  the  Federal  Reserve  banks  a  fair  proportion  of  their  cash  resources  and  of 
balances  carried  with  other  banks  and  will  to  that  extent  supplement  the  resources 
of  the  Federal  Reser^-e  banks.  The  banking  power  (,>f  the  Federal  Reser\^e  sj'stem 
vriU  be  still  frnther  increased  when  such  associations  and  banks  are  authf;rized  by 
State  law  to  invest  a  large  proportion  of  their  assets  in  bills,  notes,  di-afts,  and  accept- 
ances eligible  for  rediscount  or  purchase  by  Federal  Reserve  banks. 

From  the  foregomg  it  may  be  inferred  that  if  savmgs  banks  enter 
the  Federal  Reserve  system,  they  will  within  a  few  years  have  a 
much  smaller  proportion  of  their  assets  invested  in  real  estate  loans 
tlian  they  have  at  present. 

An  attempt  to  analyze  the  trend  of  developments  that  inevitably 
must  accompany  and  foUow  the  internal  reconstruction  of  the  bank- 
hig  system,  gives  rise  to  the  belief  that  funds  destined  for  invest- 
ment in  real  estate  mortgages  no  longer  will  follow  old  channels  in 
then-  customary  volimie.  In  fact  the  old  channels  and  arteries  of 
the  new  member  banks  are  becoming  adapted  so  rapidly  to  the  ele- 
ments of  commercial  cumulation  that  many  investment  institutions 
ah"eady  strongly  advocate  the  apphcation  of  amortization  principles 
to  then'  mortgage  business.  This  is  an  important  step  toward 
standardized  methods  for  handlmg  mortgage  secm'ities  and  should 
afford  a  sound  basis  upon  which  a  Federal  mortgage  bank  can  safely 
issue  on  broad  lines  under  Government  supervision  real  estate 
debeutm-es  and  collateral  trust  bonds. 


ECOXOMICS    OF    THE    COXSTRUCTIOX    INDUSTRY.  233 

In  discussing  the  mortgage  loans  of  institutional  investors,  !Mr. 
Harding,  of  the  Federal  Reserve  Board,  as  early  as  1914,  said: 

The  Federal  Reseive  banks  can  not  with  safety  invest  deposits  on  demand  in  non- 
liquid  l(ians  extending  over  several  yeai-s.  This  is  the  function  of  mortgage  banls 
which  by  means  of  their  bonded  obligations  may  secure  for  a  longer  period  of  years 
the  funds  which  they  propose  to  loan  on  long  time  mortgages. 

This  same  trend  of  thought  is  to  be  observed  in  a  letter  rccciA-cd 
from  the  Baltimore  Trust  Co.,  from  which  is  quoted  in  part: 

Obviouslj-  mortgages  should  have  no  place  in  the  assets  of  Federal  Reserve  banks 
by  reason  of  the  relation  of  such  banks  to  then"  member  institutions;  such  members 
should  also  refrain  from  accepting  such  collateral  in  any  large  way.  The  Federal 
land  banLs  limit  their  activities  to  country  propertj'',  with  the  result  ultimately  that 
a  gi'eat  number  of  the  interior  banks  of  the  countrj^  should  be  relieved  of  congestion 
ever  present  %\'ith  them  by  reason  of  the  fact  that  they  are  carrjdng  so  many  moilgages. 
0^ving  to  war  conditions  the  farm  banks  have  not  had  a  fair  chance  to  fulfill  their  pur- 
pose, but  this  will  come.  I  do  not  know  of  any  economic  or  practical  reason  why 
land  banks  under  an  amended  law  should  not  be  permitted  to  care  for  city  mortgages, 
which  if  half  well  selected  are  surely  as  sound  as  is  the  average  farm  mortgage  and 
especially  so  should  cotton  ever  get  down  again  to  8  cents  a  pound  witli  wheat  at  $1 
a  bushel. 

The  need  for  improved  facilities. 

In  conclusion,  it  seems  advisable  that  serious  consideration  be  given 
tovrard  devising  some  improved  machinery  for  making  and  marketmg 
real  estate  loans.  This  woiud  involve:  first,  a  standardized  and  simj)li- 
fied  method  of  examination  of  the  secm-ity  offered  on  real  estate  loans; 
and,  second,  a  system  of  real  estate  mortgage  banks  wliich  would 
rediscount  real  estate  mortgage  loans  and  issue  thereon  real  estate 
mortgage  bonds.  It  is  believed  that  such  a  system  would  decrease 
the  cost  of  loans  to  the  borrower  and  by  facilitatmg  loans  would 
increase  the  volume  of  building  operations.  Thus  there  woidd  be 
a  permanent  addition  to  the  wealth  of  the  countr}^,  and  the  small 
investor  would  gain  another  opportunity  for  safely  investing  liis 
savings  at  a  fair  rate  of  interest. 

One  of  the  palliative  measures  that  has  been  suggested  seems  to  be 
vrorthy  of  consideration.  Congress  has  been  urged  to  exempt 
mortgages  to  the  extent  of  $40,000  in  any  one  person's  hands  from 
the  Federal  income  tax  so  as  to  assure  the  average  mortgage  in- 
vestor a  net  return  commensurate  with  that  from  municipal  bonds, 
Government  bonds,  farm  loan  bonds,  and  other  similar  investments 
not  subject  to  the  Federal  income  tax.  Any  such  measure  that 
would  divert  the  flow  of  investors'  money  back  into  the  channel  of 
mortgage  loans  would  encourage  building,  which  adds  to  the  income 
produchig  wealth  of  the  Nation,  so  that,  in  the  long  run,  the  Govern- 
ment would  probably  recoup  the  loss  suffered  through  the  tax 
exemntions. 


234  ECONOMICS    or   TUK    COXSTnrCTTON   IXDV-STRY. 

Coiidusioiis. 

The  following  conclusions  inav  be  drawn  from  tlie  foregoiug 
study: 

1.  The  methods  of  maiving  real  estate  loans  are  not  sufficiontly 
standardized,  and  hence  are  more  expensive  than  need  be.  Borrower 
and  lender  are  not  thi'own  together  in  the  present  system.  The 
cluumels  tlu'ough  which  the  funds  from  the  lender  to  the  borrower 
should  flow  freely  are  obstructed. 

2.  The  main  sources  of  real  estate  loans  are  sayings  banks,  title 
guarantee  and  trust  companies,  insurance  com])anies,  building  and 
loan  associations,  and  individual  lenders. 

3.  Real  estate  loans  b}'  lending  institutions  did  not  increase  in 
proportion  to  the  growth  of  the  country  from  1913  to  191S. 

4.  Real  estate  loans  of  banks  did  not  grow  so  rapidly  as  bank 
resom'ces  in  the  United  States  from  1913  to  1918. 

5.  Saving's  banks,  insurance  companies,  and  building  and  loan 
associations  did  not  grow  so  rapidly  in  resources  as  banks  other  than 
savings  banks  in  the  United  States. 

6.  Savings  banks  in  New  York  State  did  not  grov.-  so  rapidJy  as 
other  classes  of  banks  in  New  York  from  1914  to  1917. 

7.  Real  estate  loans  of  banks  in  New  York  State  did  not  grow  so 
rapidl}^  as  the  total  resources  of  New  York  banks  from  1914  to  1918. 

8.  Statistics  indicate  that  diu'ing  1917  and  1918  there  has  been 
an  absolute  decrease  in  real  estate  loans  held  by  financial  institutions. 

9.  The  main  causes  of  the  failure  of  real  estate  loans  to  increase 
in  proportion  to  the  general  growth  of  the  country  during  the  last 
five  years  have  been  the  lack  of  marketabilitv  of  real  estate  loans, 
lack  of  standardization  in  making  loans,  changes  in  the  banking 
system.  Government  restrictions  during  the  war,  and  the  issue  of 
Liberty  bonds. 

10.  A  general  amortization  system  for  real  estate  loans  would  be 
Ixnieficial. 

11.  Improved  machinery  is  needed  for  making  and  marketing  real 
estate  loans.  This  woidd  involve  first  a  standardized  and  simplified 
method  of  examination  of  the  security  offered  on  real  estate  loans, 
and  second  a  system  of  real  estate  mortgage  banks  with  the  rediscount 
privilege. 


VI.  RENTS  AND  LAND  VALUES. 
RENTS  OF  HOUSES  AND   APARTMENTS. 

As  a  basis  for  a  tentative  estimate  of  the  advance  in  rents  of 
vrorkingjnen's  houses  durmg  the  war,  there  are  available  two  studies 
made  by  the  National  Industrial  Conference  Board,  of  Boston,  Mass., 
besides  the  statistics  on  rents  published  by  the  Bureau  of  Labor 
vStatistics  of  the  Department  of  Labor  and  the  residts  of  a  question- 
naire sent  to  real  estate  boards  of  91  cities  of  the  I'nitcd  Stales  by 
the  Division  of  Public  Works  and  Construction  Development  of  the 
Department  of  Labor.  From  its  first  study,  covering  the  period 
from  July,  1914,  to  June,  1918,  the  National  Industrial  Conference 
Board  concluded  tliat  rents  had  not  advanced  more  than  15  per  cent 
in  a  very  large  proportion  of  industrial  communities.  However,  the 
increase  varied  greatly  not  only  from  city  to  city,  but  in  different 
parts  of  the  same  city. 

In  general,  rents  did  not  increase  or  increased  A'ery  little  in  cities 
or  parts  of  cities  m  which  no  increased  demand  for  accom.modations 
occurred  because  of  war  work;  for  example,  in  Fall  River,  Rochester, 
St.  Louis,  and  the  west  end  of  Boston. 

On  the  other  hand,  m  certain  cities  where  an  exceptional  demand 
for  housmg  developed  in  consequence  of  war  activities,  a  great 
advance  in  rents  occurred;  for  example,  in  Bridgeport,  Waterbury, 
Cleveland,  Detroit,  and  the  east  end  of  Boston.  In  some  cities  no 
war  work  was  carried  on,  and  workers  were  attracted  to  other  cities, 
leaving  many  vacant  houses.  In  such  cities  rents  (h'opped;  for 
example,  in  East  St.  Louis  and  El  Paso. 

From  its  later  study,  the  National  Industrial  Conference  Boar<l 
concluded  that  the  average  advance  in  rents  from  July,  1914,  to 
-November,  1918,  was  20  per  cent,  ])ut  as  in  the  earlier  study  great 
variations  were  pointed  out  in  different  cities.  For  examj^le,  the 
increase  in  rents  paid  by  wage  earners  was  over  40  per  cent  in 
Portland  (Oreg.),  Seattle,  and  Flint,  and  over  20  per  cent  hi  Detroit, 
Ivockford,  and  IMadison,  but  the  hicrease  was  10  per  cent  or  less  ui 
Columbus,  ProA'idence,  and  Los  .Vngeles. 

The  replies  to  a  questionnaire  received  by  the  Division  of  Publi<' 
Works  and  Construction  Development  of  the  Department  of  Lal>oj- 
from  91  cities  served  to  confirm  the  general  results  of  the  studies  of 

235 


236 


KCOXOMICS    OF    THE    ( OXSTRUCTIOX    IXDUSTRY. 


tlic  National    Industrial  Conforcnco   Board.     Some    of    tlio    results 
obtainecl  from  tin;  questionnaire  arc  slunm  in  tlie  table  below: 

Adiaacc  in  nnis  of  loir-pr'ux  opaitiiunts  and  houses,  from  Junuani,  191G,  to  Junvury, 

1919. 


Cities 

fhowinf; 
no  in- 
crease. 


Ini-roa'^e 
10  to  20 
l)QT  cent. 


IncTea.se 

more 
than  20 
per  cent. 


Tyow-prif  e  city  apartments 

]/0\v-price  houses  in  ^hickly  settled  portions  of  citie; 
Low-price  houses  in  suburbs 


It  will  ]>c  observed  from  these  statistics  that  the  number  of  cities 
]-eporting  no  increase  was  larger  than  the  number  reporting  an 
increase  of  more  than  20  per  cent,  but  was  less  than  the  number 
i-eporting  an  increase  of  from  10  to  20  per  cent. 

It  should  be  noted  that  this  table  shows  the  increase  from  January, 
1916;  to  Januar}',  1910,  whereas  the  advances  shown  by  the  statistics 
of  the  National  Industrial  Conference  Board  represent  the  periods 
from' November,  1914,  to  Jmie  and  November,  1918,  respectively. 

The  following  table,  compiled  from  statistics  gathered  by  the 
Bureau  of  Labor  Statistics  of  the  Department  of  Labor,  shows  for  18 
h^hipbuilding  centers  the  advance  in  rents  at  the  end  of  both  1917 
and  1918  over  the  end  of  1914: 

Per  cent  of  increase,  in  rents  above  December,  1914- 


December. 
1917. 

December, 
1918. 

December, 
1917. 

December, 
1918. 

2.38 

a. 06 

2.63 

2.60 

2.96 

0  1.72 

n4.32 

o  18.65 

2. 48 
2.76 
6.47 
8  00 
13.  78 
38.96 
O.90 
o.  89 
11.16 
"1.68 

Los  Auceles,  Calif 

O0.64 

0  4.02 

a  22.  16 

o  .55 

1  .36 

32.64 

4.43 

Bor-tou,  Mass 

Sau    Francisco   and    Oak- 
land. Calif          .      ... 

New  York  N  Y 

a  3. 93 

Fhiladelpliiii   Pa 

Portland,  Ores; 

12.28 

Baltimore,  Mfi 

Seattle,  AVash". 

44.31 

Norfolk,  Va 

Chicago,  111 

2.55 

Detroit,  Mich 

39.03 

Cleveland.  Ohio 

11.29 

16.49 

Mobile,  Ala 

Uouston,  Tex 

O3.60 
a  7.  72 

Buffalo,N.Y 9.35 

1 

20.72 

On  the  whole,  these  increases  are  somewhat  less  than  the  20  per 
cent  average  advance  arrived  at  by  the  National  Industrial  Confer- 
ence Board.  The  statistics  and  conclusions  brought  out  in  fore- 
going paragraphs  apply  e.xclusively  to  workmen's  housing — low- 
price  apartments  and  dwellings.  For  information  concerning  the 
better  grades  of  housing,  only  the  replies  received  from  the  ques- 
tionnaire of  this  division  are  available.  These  indicate  that  the 
advance  in  rents  of  the  better  grades  of  city  apartments  and  houses 


ECONOMICS    OF   THE    COXSTRUCTIOX    INDUSTRY. 


237 


lias  been  somewhat  more  general  than  in  the  hnv-price  grades,  but 
the  increases  over  20  per  cent  are  fewer. 

^Uthough  the  increases  up  to  January  1,  1919,  were  no  greater 
than  indicated  in  the  preceding  paragraph,  rents  increased  appreci- 
ably in  numerous  localities  after  that  date.  The  upward  trend  was 
a  distinct  indication  of  their  tendency  to  advance  by  amounts  bearing 
some  relation  to  advances  in  price  and  wage  levels. 

BUSINESS  RENTS. 

The  replies  to  the  questionnaire  sent  out  from  tliis  division  showed 
that  business  rents  had  increased  even  less  than  residence  rents. 

Advance  in  rents  of  stores  and  offices  from  January,  19-16,  to  January,  1919. 


Cities 

showing 

no 

increase. 

Increase 
10  to  20 
per  cent. 

Increase 

more 

than  20 

per  cent. 

f?toio<;            .                                    .           

43 
42 

14 

10 

9 

Oilice^                                     

S 

LAND  VALUES. 

One  of  the  questions  asked  in  the  questionnaire  of  this  division  read 
as  follows:  "^Yliat  changes,  if  any  smce  1916  has  taken  place  in  the 
prices  of  land  suitable  for  (1)  office  buildings,  (2)  stores,  (3)  houses 
and  apartments  in  residentiul  districts  ? ' '  Approximately  two-thirds 
of  the  answers  stated  that  no  change  had  occurred  in  the  value  of 
land  suitable  for  any  of  those  three  classes  of  buildings. 

A  few  replies  stated  that  the  value  of  land  had  decreased.  Less 
than  one-third  of  the  replies  stated  that  land  values  had  increased, 
and  in  most  cases  where  an  increase  was  indicated  it  was  less  than 
25  per  cent. 

The  conclusion  that  there  was  no  general  advance  in  city  land 
values  during  the  war  is  confirmed  by  statistics  of  tax  assessment 
valuations.  Although  assessed  valuations  of  real  estate  do  not 
always  accurately  reflect  the  market  values  of  the  property,  never- 
theless there  has  been  a  tendency  in  recent  years  for  assessed  values 
to  approach  more  closely  to  market  values,  instead  of  remaining 
far  below  as  was  formerly  the  case.  Consequently,  if  there  had  been 
any  increase  in  the  value  of  real  j^roperty  in  recent  yeai-s,  it  shoiUtl 
be  sho^Mi  by  at  least  as  great  an  increase  in  assessed  valuations. 
The  figures  mdicate,  however,  that  assessed  valuations  of  real  estate 
in  cities  of  30,000  or  over  increased  from  1913  to  1915  (two  years) 
by  7.09  per  cent,  on  the  average;  from  1915  to  1916  by  an  average  of 
6.73  per  cent;  from  1916  to  1917  by  an  average  of  4.14  per  cent;  and 
from  1917  to  1918  by  an  average  of  not  over  4  per  cent.      (Tlie  figures 


238  KCOXOMICS   OF   THK    (JONSTIIUCTION    INDUSTRY. 

[<•!•  1018  tire  not  yvl  j>ublislied.,  i)ut.  were  kiiuUy  provided  for  tlie  p-ur- 
pose  of  this  iiu|uiiy  by  tlie  Ceiisui^  Bureau.)  In  deriving;  these  figures 
allowance  has  l)een  made  for  the  increase  in  tb.e  number  of  cities  re- 
])orted,  but  no  allowance  has  been  possible  for  increases  in  the  areaa 
of  individual  cities. 

If  the  value  of  real  estate  had  increased  since  IDlo  at  the  same 
rate  as  the  prices  of  commodities,  and  assessed  valuations  had 
risen  just  enough  to  coiTespond,  the  assessed  A-aluation  of  real  estate 
In  all  cities  of  the  United  States  of  30,000  or  over  would  have  been 
at  least  $46,000,000,000  in  the  fiscal  year  ended  June  30,  191S,  in- 
stead of  its  actual  amount,  less  than  $31,000,000,000. 

REAL  ESTATE   BOOKKEEPING. 

The  value  of  land  is  fundamentally  determined  )>v  the  demand 
for  it.  In  cities  this  means  the  demand  for  buildings  of  all  s(»rts, 
and  this  in  turn  results  from  the  conditions  or  prospects  of  business 
and  the  gi-owtli  of  population  (which  to  some  extent  continues  irre- 
spective of  fluctuations  in  prosperity). 

Besides  the  demand  for  buUdings,  the  cost  of  erecting  and  main- 
taming  tliem  comes  into  the  determination  of  land  values.  This 
includes  costs  of  material  and  of  labor,  the  rate  of  interest,  and 
taxes,  including  assessments  for  city  improvements.  Any  attempt 
to  foresee  the  future  course  of  land  values  must  consist  in  an  anal\^is 
of  each,  of  the  above-mentioned  factors.  However,  it  was  fomid 
that  recent  statistics  bearing  on  a  number  of  these  factoi-s  were  not 
available.  It  was  determined  therefore  to  draw  np  a  C|uestionnairc 
that  would  reveal  not  only  the  tendency  of  net  rents  in  the  last  fi>ur 
years,  but  also  the  tendency  as  regards  the  several  items  affecting 
net  rents  from  the  point  of  view  of  sound  real  estate  booklveepiiig. 

The  questiomiaire  is  mainly  the  ^^-ork  of  Irving  Alacomber,  vice 
president  of  the  United  States  Housing  Corporation,  in  consultatioa 
with  Mr.  IngersoU,  secretary  of  the  National  Association  of  Real 
Estate  Boards.  It  was  sent  to  150  real  estate  boards  b}-  Mr.  Inger- 
soU, with  the  request  that  each  board  appoint  a  committ-ee  to  pro- 
cure the  desii'ed  information.  Although  the  rephes  were  received 
too  late  for  tabidation,  a  portion  of  the  questioimaire  is  reprinted  here 
as  an  example  of  the  classification  of  revenues  and  ex^xMises  which 
sound  real  estate  bookkeeping  demands: 


ECOXO-MICS    OV   THE    COX^TKUCTIOX    IXDUsTKi'.  239 

Classificatiox  of  Retexue  axd  Expexse  Items, 
showing  distribution-  desired  ox  xoril  a. 


EEVEXUES: 

Rent  Eakn'ed— 

Accruals  on  occupancy,  whether  collected 
oruncollccteJ. 
Other  Revenues— 

All  profits  on  telephone  service,  elec- 
tricity, water,  supplies,  waste  paper,  janitor 
service,  etc. 
OPERATIVE  EXPEXSES: 

M.AIXTENAICCE— 

Upkeep  of  grounds:  Walks,  drives,  fences 
and^  walls,  lawn  and  garden,  planting, 
general,  etc. 

Upkeep  of  building:  Roofs  and  down- 
spouts, porches  and  areas,  halls  and  stair- 
ways, rooms  and  closets,  laundries  and 
lockers,  general,  etc. 

Upkeep  of  equipment:  Screens  and  a^vn- 
ings,  stoves  and  gas  logs,  furnishings,  safety 
appliances,  telephone  and  signals,  lighting, 
tanks  and  cisterns,  other  plumbing,  pumps 
and  heaters,  other  heating,  chutes  and  in- 
cinerators, machinery  and  tools,  spriokler 
system,  elevators,  engines,  generators, 
general,  etc. 
Sermce — 

Electricity,   water,   supphes,   coal,   gas, 
steam,  wages  of  all  employees,  disposal  of 
ashes,  of  rubbish,  of  garbage,  inspection, 
telephone,  etc. 
Insurance— 

Fire  protection  on  building,  on  furaish- 
tngs,  on  rents,  etc.;  liability  protection  on 
employees,  on  general  public,  on  boilers,  on 
elevators,  etc.;  plate-glass  protection  on 
windows,  etc. 
Salaries— 

Building  superintendent   and  his  office 
employees. 
Taxes— 

I.evied  on  land,  building,  and  equipment. 
Assessments — 

Levied  wth  taxes  for  street  lighting, 
street  cleaning,  street  maintenance,  street 
improvements,  etc. 


OPERATIVE  EXPEX.SES— Continued. 
Depreciation— Reser\t:— 

Arbitrary  amount,  or  iiredeierminiHl  |>er 
cent  of  building  cost  and  equipment  cost, 
written  off  for  physical  deterioration  an* 
obsolescence. 

ADMINISTRATIVE  EXPEXSES: 
Office  Overheai)— 

Cost  of  office  equipment  and  appliance  ■, 
rent  for  space  occupied,  janitor  service,  tele- 
phone and  telegraph  sernce,  magazines anfi 
papers,  reports  and  directories,  supplies, 
postage,  electricity,  water,  steam,  gas;  fin 
insurance  on  equipment  and  records,  lia- 
bility insurance  on  office  employees,  indem- 
nity insurance  on  general  jiulilie;  U-gal sen- 
ices,  legal  counsel,  and  other  legal  items, 
advertising,  general  taxes  on  personal  prop- 
erty, on  moneys,  on  credits,  etc.;  deprecia- 
tion of  equinmeni,  etc.;  commissions  paid, 
salaries  of  building  manager  and  employ- 
ees, or  equivalent  in  o\vner"s  time  and 
attention,  etc. 
Eent  Conceded— 

Accruals  on  occuiiancy  given  to  tenants 
as  an  inducement  or  bonus  and  for  whicU 
they  are  not  charged  and  do  not  pay. 
DouBTFU^L  Accounts— Reserve— 

Actual  amount  or  predetermined  perceal 
of  outstanding  accounts  receivable  vrritiea 
oS  as  uncollectible  and  lost. 
Interest— 

Accruals,  commissions,  and  expenses  in 
effecting  and  renewing  loans,  etc. 
NOTE.— Per  Cent  Occupancy. 

Number  of  months  of  actual  use  or  occupancy 
di\-ided  by  the  number  of  months  of  posfibls 
occupancy. 

Or  number  of  square  feet  of  actual  occupancy 
(averaged)  divided  liy  iinmber  of  so"!  ir.i  f,'.'t  of 
possible  occupancy . 


240  ECONOMICS   OF   THE   CONSTRUCTION    INDUSTRY. 

Form  A. — Comparative  Yearly  Financial  Statement. 

( /u.vi  (./  baitding City  and  State 


I'ropert y  designation. 

Prewar  prriorl. 

War  period. 

Inerea.se, 
I91S  over  1916. 

Decrease, 
1918  over  1916, 

Code  number. 

1914 

191.-.          1910 

1917 

191S 

Vpt 

Amount.  ^^^ 

Amount. 

Per 

cent. 

licvennos: 

Kent  earned 

1 

Other  reveuues 

1 

• 

1        1              i          1 

I 

t                    i              !                 ' 



Total  revenues  I 

.   ...1     . 

1 

1 

, 

1 

j 

1 



Expenses: 

Maintenance 

1 

1 

1 

Service 

j 

■ 

1 

Insurance 

1 

I""l 

! 

Salaries 

i  ■ 

1 

1 

Taxes !... 

-■■■]■■■ 

1     . 

i 

Assessments 

\ 

i 

Depreciation— reserve. . 

\ 

1... 

i !"■" 

'"""1 

Total  operative 

1     . 

1 

1 

OfTicc  overliead 

j 

.    Kent  conceded 

1 

1 

Doubtful  accounts— re- 
serve  

i     . 

!              ■                                                                                           1 

Total  administrative. 

\ 

1 

...: •    ..i 1 1....! 

1 

1""" 

....          ,       ,                  1       I 

Total  expenses 

1 

.! i i..    .  1  ...1    ... 

j 

1            ••••!         1           1       1 

Revenues  less  expenses 

1 

1          !       '         ! 

1 

Interest  (deduct; 

;...! 

1 

t                i           :             i 

. 

1 

•  ■' 

1 

Net  earnings — amoimt 

j 

1        i 

i        i     ^       '        i    -  ' 

== 

1 

= 

: 1                               1 

Per  cent  occupancy 

.Ti  .  i  .  .;■ 

_     _    i            i       __.' 1 

,..  .| 

Net  earnings,  per  cent  of 
equity 

i     1      !       !     ^ 

" 

Capital  investment: 

Loan 

1 
1 

1 

i 

Equitv 

1 

! 

1'"" 

1 

■••! '•■••. i 

Total  investment 

I'll 

==-.= 

== 

Tax  value  of  property: 

Land 

1 

1 

Building 

...... 

!•■• 

Total  tax  value 

.     -    i     ! 

i    1   J 

r    ! 

l----j--— , 1 

Tax  rate  per  1,000 



.1  . 

-1     i  .  1        1 

^= 

■           1        1 

Population  (best  local  esti- 
mate)   

Mill 

EXl»L.^X.\TOHY    NOTES. 


VII.  DEFERRED  CONSTRUCTION. 

The  Division  of  Public  Works  and  Construction  Development  of 
the  Information  and  Education  Service  of  the  Department  of  Labor 
sent  out  in  January  about  15,000  questionnaires,  mainl}'  to  archi- 
tects, engineers,  and  State,  county,  and  city  officials  throughout 
the  United  States. 

The  questionnaired  were  asked  to  report  on  projects  whicli  had 
been  planned  but  not  constructed  at  the  time  of  the  armistice,  to 
give  the  estimated  cost  of  these  projects,  and  to  state  why  contracts 
for  them  had  not  been  let  since  the  armistice. 

Projects  to  the  number  of  6,472  were  reported  on,  with  a  total 
valuation  of  $1,711,802,000.  Some  of  the  projects  had  been  deferred 
for  two  years  because  of  war  restrictions  and  war  conditions.  The 
residts  of  this  questionnau'e  have  been  tabulated  and  are  shown  in 
Tables  96  to  104,  inclusive. 

As  reasons  for  postponmg  building  operatimis.  1,781  question- 
nau'es,  29  per  cent,  reported  materials  too  higli;  1,320,  20.5  per  cent, 
reported  wages  too  high;  401,  6  per  cent,  reported  difficidty  in  ob- 
taining loans;  4  per  cent  reported  shortage  of  materials;  a  compara- 
tively small  number  reported  inefTiciency  of  labor. 

Conclusion:  It  is  apparent  that  high  costs  of  material  and  labor 
were  the  compellmg  reasons  for  the  hesitancy  in  builduig  after  the 
armistice.  Shortage  of  materials  and  shortage  of  labor  were  local 
phenomena  and  not  widespread.  Difhcuity  of  obtammg  loans  was 
ill  part  a  result  of  the  high  cost  of  building.  The  mam  task  that 
confronted  the  buildmg  industry  of  the  country  was,  tlierefore, 
citlicr  the  removal  of  these  high  costs  or  some  readjustment  to  them. 
121297°— 19 IG  241 


242 


ECOirOMICS   OF   THE    COXSTRL'C'TIOX    INDUSTRY. 


Tabi,e  90. — Drfrnrd  construction  projects. 
[Tabulated  liom  rejjlies  Lo  a  questionnaire  of  the  Division  of  Public  Works  and  Construction  Development.) 


Alabama 

Ala-ska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

District  of  Columbia 

Florida 

Georgia 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentuclo'' 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 


Niim- 
bor  of 
proj- 
ects. 


54 
4 

34 

78 

144 

()9 

110 

U 

22 

14 

24 

39 

365 

179 

21S 

139 

92 

100 

49 

58 

227 

230 

150 

39 

231 

63 

So 


^'ablations. 


307,110,000 

1,100,000 

9,580,000 

12,225,000 

110,000,000 

23,415,000 

23,390.000 

6,365,000 

6,470,0(X) 

1,140,000 

10,675,(X)0 

8,645,000 

175,045,000 

21,300,0<X) 

26,390,000 

34,295,000 

13,155,000 

38,030,000 

4,775,000 

14,615,000 

44,390,000 

131,285,000 

36,710,000 

11,500.000 

126,185,000 

5,830,000 

16.710.000 


States. 


Novadu 

New  Hami».shire. 

New  Jersey 

New  Mexico 

New  York 

North  Carolina.. 
North  Dakota... 

Ohio 

Oklahoma 

Orpgon 

Permsylvania 

Rhode  Island 

South  Carolina. . 
South  Dakota.. . 

Tcnnpsseo 

To.Ka,'i 

Utah 

Vermont 

Virginia 

Washington 

^\est  Virginia. . . 

Wisconsin 

Wyoming 

Miscellaneous 


Num- 
ber of 
proj- 
ects. 


3 
20 

328 
26 

673 
31 
38 

805 
77 
34 

WJ2 
22 
46 
65 
52 
89 
78 
15 
97 

105 
92 

224 
17 
35 


Total 6.472 


Valuations. 


$1,860,000 

2,166,000 

62,995,000 

4,000,000 

164,46-5,000 

4.100,000 

3,040,000 

171,335,000 

9,275,000 

6,875,000 

127,345,000 

14,830,0«)O 

28,250, JOO 

5,225,  XK) 

6, 720,. 100 

23,290,000 

19,275  000 

1,350,000 

34,530,000 

46,615,000 

16,. 355, 000 

32,090,000 

3.355,000 

5,445.009 


1,711,802,009 


PRH'ATE. 


Classes. 


Num- 
Ijer  of 
proj- 
ects. 


Apartments 

Amusements 

Business |        766 

Dwellings 729 

Educational 95 

Hospitals  and  homes |  85 

Hotels 


Valuatiou.s. 


821,485,000 
8,850,000 

100,787.000 
34,675,000 
10,120,000 
14,190,000 
33,940.000 


Classes. 


Num- 
ber of 
proj- 
ects. 


Manufacturing 

Religious 

Social 

Miscellaneous.. 

Total.... 


388 
318 
117 
197 


3.378 


Valuations. 


$79,740,000 
17,655.000 
15,345.000 
52,3-15,000 


481,062,000 


PUBLIC. 


Classes 


Bridges 

Canals,  levees,  and  water 
fronts 

City  halls 

Fire  and  police  stations 

Hospitals,  institutions,  and 
homes 

Lighting  plants 

School.-? 


Num- 
ber of 
proj- 
ects. 


178 


203 
30 
508 


Valuations. 


§-19,090.000 

88. .870. 000 
10.755.000 
4,200,000 

63,870,000 

14,660.000 

113,260.000 


Classes. 


Sewers 

Street  improvements   and 

road  work 

Water  works 

Railroad  work 

Miscellaneous 

Total 


Num- 
ber of 

proj- 
ects. 


294 


1.396 
348 


289 
3.094 


Valuations 


§81,755,000 

448.155,000 
204,3.50,000 
93,690,000 
164.068.000 


1,230,740,000 


EC02srOMICS   OF   THE   COXSTRUCTIOX   i:Js'DUSTRY. 


243 


Table  97. — Deferred  projects — public  buildings  and  public  utilities. 

BRIDGES,  CANALS,  LEVEES,  AND  WATER    FRONTS. 
[Talmlated  from  replies  to  a  questionnaire  of  the  Division  of  Public  Works  and  Const  ruction  Development  .J 


States. 


Bridges. 


Canak,  lovee.';,  and 
waterfronts. 


Numl)er 

of 
projects. 


Value  in 

thousaJKi-S 
of  dollars. 


Number 

of 
projects. 


Value  In 
thousands 
of  dollars. 


AlaV)ama 

Arkansas 

California 

Colorado 

Connecticut 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts. . 

Michigan 

Minnesota 

Mississippi 

Missouii 

Montana 

Nebraska 

New  Jersey 

New  Mexico 

New  York 

North  Dakota.. 

Ohio 

Oklahoma 

Oregon 

Pennsylvania . . 
Rhode  Island . . 
South  Carolina. 
South  Dakota. . 

Tennessee 

Texas 

Utah 

Virginia 

Washington 

West  Virginia. . 

Wisconsin 

Wyoming 

Miscellaneous.. 


500 

113 

65 

520 

3.50 

10,550 

80 

1,210 

9O0 

2,500 


250 

30 

870 

1,220 

35 

8:50 

1,3.50 

200 

90 

2,  .500 

10 

2,100 

2.50 

8,S90 

450 

900 

4,615 


1,000 
150 
250 


Total. 


CO 
1^5 
3,r)00 
800 
1,515 
100 
CO 

411,0'JO 


l.OfW 
154 
8«15 
100 
CM) 
10 

1,200 
8fW 

2,C!'<) 
101) 

im) 

20,000 
10 


15 

"m 

30<J 
3,9.50 
I2.O1W 


13,709 


6,100 
30 
1,409 
fi,120 
1.210 
5,000 


l.SOO 

300 

10 

70 

4,660 

1,900 

210 


3,000 


244 


ECONOMICS    OF   TTIK    COXSTTtT'CTION    INDUSTRY. 


Tabi.b  !)S. — Di'Jnred  prnjccls — public  buildings  and  public  utilities. 

CITY   HALLS,   FIUK    AND    POLICE   STATIONS. 

[Tabulalid  from  roplios  I  o  a  questionnaire  of  tho  Division  of  I'uhlic  Works  and  ( 'on.st  ruction  Devrlopmrnt.] 


Slates. 


Cilv  halls. 


Number 
of 

projects. 


Value  in 
thousand.s 
of  dollars. 


Fire  and  police  sta- 
tions. 


Number 

of 
projects. 


Value  in 
thou.'iands 
of  dollars. 


Alabama 

Arkansas 

California 

Colorado 

Georgia 

Indiana 

Iowa 

Kansas 

Kentucky 

Maine 

Massachusetts. 

Michigan 

Minnesota 

Mississippi 

Missouii 

Montana 

Nebraska 

New  Mexico... 

New  York 

Ohio 

Oklahoma 

Pennsylvania. 
South  Dakota. 

Texas 

Utah 

Virginia 

Washington... 
West  Virginia. 

Wisconsin 

Wyoming 


Total. 


150 
10 
6.50 
100 
200 
775 


lo 
5.M 

25 
400 

10 

70 

100 

1,100 

150 

230 

50 


735 

50 

4.270 

20 

60 

6.^ 
10 
15 

230 

100 
30 


10, 755 


50 

'ioo 


40 

2,350 

70 

10 

200 


560 
740 


25 


4,200 


Table  99. — Deferred  projects — public  buildings  and  public  ulilities. 

HOSPITAI-S,  INSTITUTIONS,  AND  HOMES. 

[Tabulated  from  replies  to  a  questionnaire  of  the  Division  of  Public  Works  and  Construction  Development.! 


Alabama 

California 

Colorado 

Connecticut 

District  of  Columbia 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Massachusetts 

Michigan 

Minnesota 

Missouri 

Montana 


10 

1,750 

1,400 

25 

2,100 

40 

3,020 

735 

1,035 

275 

80 

100 

150 

3.720 

4,300 

5.50 

100 

15 


NcV)raska 

New  Jersey 

New  Mexico... 

New  York 

North  Carolina 

Oliio 

Oklahoma 

Oregon 

Pennsylvania. . 
Rhode"  Island.. 

Tennessee 

Texas 

Utah 

Wasliington . . . 
West  Virginia . 
Wisconsin 

Total.... 


203 


1,200 

695 

40 

20,485 

250 

10,310 

550 

210 

6,  ISO 

900 

1,350 

IOO 

700 

950 

50 

595 


63,870 


ECONOMICS    OF   THE    COXSTEUCTIOX    INDUSTRY. 


245 


Table  100. — Dejcrred  projects — public  buildings  and  public  r(tilities. 

LIGHTING   PLANTS. 

[Tabulated  from  k  plies  to  a  questionnaire  of  the  Division  of  Public  Works  and  Construction  Development.) 


States. 


California... 

Colorado 

I.linois 

Indiana 

Kansas 

Maine 

Michigan . . . 
Minnesota . . 

Missouri 

New  Mexico 


Number 

of 
projects. 


Value  in 

thousands 
of  dollars. 


SO 

50 

920 

25 

20 

40 

1,050 

3.50 

500 

90 


5"tates. 


Ohio 

Oklahoma 

South  Carolina 
South  Dakota. 

I'tah 

Washington . . . 
Wisconsin 

Total.... 


Number 

of 
projects. 


Value  In 
thou.sanda 
Of  dollars. 


5,250 

10 

300 

140 

500 

5,000 
335 


11,060 


T.4.BLE  101. — Deferred  projects — public  buildings  and  public  utilities. 

SCHOOLS. 
[Tabulated  from  replies  to  a  questionnaire  of  the  Di%ision  of  Public  Works  and  Construction  Development.) 


States. 


Alabama 

Arizona 

Arkansas 

California 

Colorado 

Connecticut . . 

Delaware 

Georgia 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 


Number 

of 
projects. 


Value  in 
thousands 
of  dollars. 


2,  .575 

290 

85 

2, 2.55 

8, 335 

3,230 

500 

75 

340 

9,455 

1,430 

1,495 

820 

445 

800 

480 

115 

3,660 

12.400 

0,820 

80 

850 

240 


States. 


Nebra.ska 

New  Hampshire 

New  Jersey 

New  Mexico 

New  York 

North  Carolina. 
North  Dakota.. 

Ohio 

Oklahoma 

Oregon 

Pennsylvania... 
South  Carolina. 
South  Dakota.. 

Tennessee 

Texa.s 

Utah 

Vermont 

Virginia 

Washington 

Wc.'^t  Virginia . . 
Wisconsin 

Total 


Number 

of 
projects. 


Value  in 
thoasands 
of  dollars. 


4G5 

2G0 

195 

75 

25,895 

300 

910 

10,490 

1,350 

80 

9,165 

100 

530 

635 

900 

1,090 

20 

28.5 

890 

21.5 

2,5S5 


113,260 


246 


ECONOMICS   OF   THE   COXfeTRUC'TION   INDUSTR.Y. 


Taeji.ic  102. — Deferred  'projects — public  huildings  and  puhHc  utilitiet. 

SEWERS,  STREET  IMPROVEMENTS,  AND  WATERWORKS. 

(Pal  miateil  from  re|)lios  to  a  questiormaire  of  tlip,  DivLsion  of  Tulilic  Works  and  (  onstruction  1  'evelopmentj 


■ 

Sewers. 

Street  improvements. 

Walerworics. 

states. 

Number 
of 

projects. 

Value  in 
thousands 
of  dollars. 

Num»)er 

of 
projects. 

Value  in 
thousands 
of  dollars. 

Number 

of 
projects 

Value  in 
thousands 
of  dollarit. 

Alabama 

2 

120 

18 

2 

13 

36 

34 

16 

17 

8 

4 

5 

19 

106 

67 

60 

48 

29 

19 

0 

8 

35 

60 

29 

15 

60 

19 

17 

3 

6 

41 

14 

68 

13 

13 

172 

17 

2 

52 

2 

12 

15 

10 

37 

19 

3 

20 
32 
31 
79 
6 
9 

1,570 
500 
4,8K() 
K,  300 
2fJ,  x?;5 
(i.K'.O 
5,735 

5 ,  355 
220 
435 

7.0  25 
38,  s:jO 

6,  •i.l^ 
11,125 
23, 815 

2,560 
4,800 
1,300 
6,150 

11,450 

21,065 

16,395 
5, 130 

22, 480 
3,140 
5,155 
1,860 
1,025 
9,160 
3, 175 

10,295 
1,765 
1,100 

04,595 
1,160 
1,840 

27,440 
270 

25,700 
745 
1,400 
6,735 
7,855 
1,020 
3,045 

17,590 
4,300 

10, 835 
1,700 

1,  i:o 

1 

26a 

Arltona.                           

3 

7 
6 
1 
6 

600 

1,580 

1,275 

10 

1,020 

2 

7 
11 

7 

1 
1 
3 
6 

31 
6 
7 

12 
2 
2 

1,000 

466 

California 

59,330 

Colorado 

1,670 

Connecticut 

2,080 

100 

Florida  . .                           

30 

700 

1 

20 
8 

10 
5 
3 

i 
1 

15 
15 
10 
'J 
14 

40 

10,235 

1,070 

1,220 

630 

35 

130 

10 

1,000 

3,480 

4,495 

1,595 

1,970 

15,265 

860 

Illinois 

9,790 

535 

Iowa 

330 

Kansas .                     

650 

Kentucky 

800 

Louisiana 

326 

Maryland 

3 
13 
20 
11 

1 
11 

3 

3 

240 

Massachusetts    .        

965 

27,455 

Minnesota 

1,130 

10 

Missouri 

11,370 

750 

Nebraska     

5 

370 

35 

7 

415 

5 
3 

23 
1 
1 

40 

19 
3 

13 
4 

2,975 

210 

18 

5,905 

33,325 

350 

10 

Ohio 

46 
4 

12,460 
2S0 

9,«U0 

Oregon                                  

2,310 
1,110 

25 

6,455 

9,515 

11,010 

2 
1 
4 

160 

760 

420 

2,485 

1,175 

South  Dakota 

8 
13 

m 

Texas.        .            

235 
2,190 

1,310 

3 

-       5 
1 
16 

140 

3,325 

60 

1,505 

4 

6 
5 
16 
1 

250 

Washington 

4,919 
1,875 

Wisconsin 

1,115 

200 

1 

10 

i 

Total 

294 

81,755 

1,396 

41^.155 

1            348 

204,350 

ECO^'OMICS   OF   THE   C'O^'STRUCTIOX   IXDUSTRY. 


247 


Table  103.— Deferred  2)rojects — public  buildings  and  jnihUc  lUilities. 
RAILROADS,  TRACKS,  AND  STATIONS. 
[Tabulated  from  replie.s  to  a  questionnaire  of  the  Division  of  i'ulbio  Works  and  Construction  D<^  velotiineiu.l 


States. 

Number 

of 
project?. 

Value  in 
thousands 
of  dollars. 

States. 

Numlier 

of 
projicl?. 

Value  in 
thousands 
of  doUiu-s. 

California 

1 
2 
1 
2 
1 
5 
1 
1 

1,000 

60,300 

1,688 

1,320 

250 

20.4<t7 

2,000 

65 

Ohio 

Oklahoma.. 

i 

2 

1 

1 

2 

M 

f^i 

ll>) 

South'l)akota 

l.'^OO 

Utah 

1.100 

Wyoming 

1 

1            Total 

1 

2.T'(1 

"  , 

North  Carolina 

2:j  I          y;i.ii>w 

Table  104. — Deferred  projects — public  buildings  and  public  utilities. 

MISCELLANEOUS. 

^Tabulated  from  replies  tea  questionnaire  of  the  Division  of  PubUc  Works  and  Construction  Development.] 


States. 


Alabama 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

District  of  Columbia 

Florida 

Georgia 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 


Number 

of 
projects. 


Value  in 
thousands 
of  dollars. 


l.i 
1,060 

300 
2,175 
1,300 
4,910 

3.50 
2,000 

100 

9,190 

50 

8. 640 

40 

600 

120 

120 
7,295 

500 

1,083 

8,  S85 

18, 070 

680 


States. 


Number 

of 
projects. 


Missouri 

Montana 

New  Jersey 

New  York 

North  Carolina 
North  Dakota. 

Oliio 

Oklahoma 

Oregon 

Pemisyivania.. 
Rhode  Island. . 
South  Carolina 
South  Dakota.. 

Temiessee 

Texas 

Utah 

Virginia 

Wusliiiigtoa . . . 
West  Virginia. 
Wisconsin 

Total... 


289 


Value  In 
thoiLsanils 
of  dollars. 


33, 60^ 
20 

2.26.3 

6,87.5 
3W 
100 

5,113 
350 
590 

5,350 
910 
401) 
300 
3.^ 

1.00") 

1  :») 

25,  *)l| 

i,:io 
no 

9, 950 


164,068 


A  questiomiaii-e  is  seldom  expected  to  bring  out  a  full  quota  of 
replies.  A  glance  at  Tables  96  to  104  indicates  that  this  ques- 
tionnaire was  no  exception  to  the  rule.  The  proportion  of  replies 
from  public  officials  was  evidently  larger  than  that  from  aichitects 
and  others  interested  in  private  construction  projects.  Iiidcod,  the 
replies  concernmg  private  projects  were  so  few  tiiat  it  was  nut 
thought  w^orth  while  to  classify  them  by  States. 

For  example,  the  total  number  of  deferred  dwellings  rcA-ealed  by 
the  questionaire  was  only  729  for  the  country  as  a  whole,  yet  it  is 
knowTi  that  a  smgle  city  of  the  first  rank  builds  as  many  dwellings 
as  that  m  a  normal  year. 

It  is  to  be  noted,  therefore,  that  the  foregoing  statistics,  particu- 
larly those  relatmg  to  private  construction,  evidently  do  not  endjrace 
all  projects  for  which  plans  had  been  drawn  but  for  which  contracts 


248  ECONOMICS    OF    THE    (JONSTRUCTION    INDUSTRY. 

liad  not  })<M'ii  let  {it  the  tiinc!  of  tho  armistice.  Furtlicnnoj-c,  (ncii  if 
iliey  liad  cinbraccd  all  such  projects,  tlioy  would  not  bo  in  any  sense 
an  exact  measure  of  the  present  need  for  building.  However,  with 
these  considerations  in  mind,  the  deferred  construction  which  they 
record  at  the  time  of  the  armistice  is  notably  large. 
Kcspectfully  submitted. 

(Signed)  Edwin  J.  Cusj-p, 

M.  A.  Mikkelsen, 

Directors, 
Warren  Case, 
Everett  Domixick, 

TlIOMAS    S.  IIOLDEX, 

Augustus  P.  Norton, 
Catherine  J.  Paine, 
l.  a.  rufener, 
John  Wiiyte, 
Staff  Memhers,  Economic  Section; 
Division  of  Public  Worlds  and  Construction  Develoimienb. 


SELECTR  E  BIBLIOGRAPHY. 

This  bibliography  has  been  compiled  "svith  a  view  to  acquainting  architects,  con- 
trartors,  engineers,  manufacturers  of  building  materials,  and  others  interested  in 
the  construction  industry  with  some  of  the  main  sources  of  information  concerning 
their  industry.  It  has  therefore  been  made  selective  and  descriptive  rather  than 
exhaustive. 

I.  COST  AND  SUPPLY  OF  BUILDING  MATERIALS. 

I.  General  Information  on  Prices. 

1.  V\liolesale  Prices,  Wages,  and  Transportation;  report  by  Mr.  Aldrich  from 
the  Committee  on  Finance.  March  3,  1893.  Senate  Report  Xo.  1394,  forty- 
second  Congress,  Second  Session,  Part  II.     (Known  as  the  Aldrich  Report.) 

Gives  price  records  on  a  large  number  of  articles,  extending,  in  some  cases,  as  far  back  as 
the  1810's  and  tip  to  the  year  1S93. 

2.  Gold,  Prices,  and  Wages  Under  the  Greenback  Standard,  by  Dr.  Wesley  C. 
Mitchell  (Berkeley,  1908). 

Covers  the  Civil  War  jieriod  and  the  reconstruction  period  following.  The  price  tables  used 
were  taken  from  the  Aldiich  Report. 

3.  Equation  of  Exchange  for  191G,  by  Irving  Fisher.  American  Economic 
Review,  December,  1917,  p.  934. 

4.  Appraisals  and  Rate  Making,  by  Cecil  F.  Elmes,  of  the  Engineering  Staff  of 
Sanderson  ik  Porter,  Chicago. 

A  paper  read  at  the  fifteenth  annual  meeting  of  the  Illinois  Gas  Association,  March  20, 1919. 
Discusses  problems  of  valuation  of  public  utilities  and  rate  making  brought  about  by  the  new 
price  level.  Gives  curves  of  prices  in  England  for  sLx  centuries  on  wheat,  iron,  lead,  cattle, 
.sheep;  also,  ciu-ves  of  artisans'  wages  for  six  centuries  in  England.  A  valuable  contribution 
to  the  study  of  the  1919  price  situation. 

5.  Prices  During  the  War  and  the  Readjustment  Period,  by  T.  S.  Ilolden. 

Pamphlet  issued  by  the  United  States  Department  of  I.abor,  April,  1919.  Summarizes 
briefly  the  price  situation  as  affecting  the  building  outlook  for  1919. 

6.  Lumber  and  Its  Uses,  by  R.  S.  Kellogg.  Radford  Architectural  Co.  Chicago, 
1914. 

This  is  a  study  of  the  economic  uses  of  lumber  and  lumber  products.  This  was  used  as  an 
exhibit  before  the  Interstate  Commerce  Commission. 

7.  The  Price  Problem  in  the  Lumber  Industry,  by  Dr.  Wilson  Compton,  Ameri- 
can Economic  Pteview,  September,  1917. 

II.  Government  Publications. 

1.  Bulletins  of  the  Geological  Survey. 

The  Siu'vey  Lssues  annually  bulletins  on  the  produciion  of  various  mineral  products.  Of 
special  interest  in  connection  with  building  materials  are  those  on  stone,  cement,  lime,  slate, 
sand,  and  gravel,  and  clay-working  industries  in  the  United  States.  The  last-named  also 
gives  data  on  building  operations  in  ilie  United  .'^tates. 

In  each  of  these  bulletins  there  is  presented,  in  addition  to  production  statistics,  a  general  sur- 
vey of  the  industry  in  question  for  the  year,  together  with,  in  most  eases,  average  prices  of  the 
product  for  the  various  years  included  in  the  production  tables.  Production  statistics  are  given 
by  regions,  as  well  as  by  totals  for  the  whole  eoimtry.  Statistics  of  imports  and  exports  are 
given. 

On  the  whole,  these  bidlelins  conlaiii  a  large  mass  of  very  valuable  information. 

249 


250  KCONO.MK^S   OF   THK   (^OXSTRUCTIO^^   INDUSTRY. 

II.  Government  Publications — Contimipd. 

2.  Bulletins  of  the  United  States  Bureau  of  T,nl)or  Stntistir-H. 
Wholesale  Prices.     iHsued  annually. 

Gives  tnontlily  ((uofntions  on  29*  comniodilios,  together  v.  itli  jirino  indices,  by  groups  and 
for  nil  commodides,  from  the  year  IS'JO  to  date.  Contains  a  lnra)>cr  and  Imildinfr  tnaferials 
group,  with  27  commodities  listed,  together  with  iirice  in<licc.s  for  the  fa"oii|«. 

Monthly  Labor  Reviev. 

Gives  indices  for  wholesale  prices,  by  groups  and  for  all  commodities,  toj.'elher  wilhstatktics 
of  retail  prices  of  the  commodities  that  make  up  the  cost  of  li\iii!;,  statistics  on  wage*;,  and 
other  general  information  connected  with  labor  snltjecls. 

3.  Federal  Reserve  Bulletin.     Issued  monthly. 

Gives  review  of  business  coTidllions,  reprintin'^  prici-  indices  compiled  by  varioiLS  statistical 
organizations. 

4.  Bulletins  of  the  Price  Section,  War  Industries  Board. 

These  bulletins  (57  in  number)  give  quoted  and  relative  prices  on  nmncrous  commo<iities 
by  months,  by  quarters,  and  by  years,  for  the  period  1913-1919.  Of  special  interest  in  con- 
nection with  biulding  materials  are  the  following: 

No.    1.  Summary. 

No.   2.  International  Trice  Comparisons. 

No.    3.  Government  Control  0^  er  I'rices. 

No.   6.  Prices  of  Building  Materials. 

No.  33.  Prices  of  Iron,  Steel,  and  their  Products. 

No.  38.   Prices  of  Clay  Products. 

No.  39.  Prices  of  Sand  and  Gravel. 

No.  40.  Prices  of  Quarry  Products. 

No.  41.  Prices  of  Cement . 

No.  42.  Prices  of  Gla,ss. 

No.  43.  Prices  of  Lumber. 

No.  41.  I'rices  of  Paints  and  Varnishes. 

No.  51.  Prices  of  Wood-Distillation  I*roducts  and  Naval  Stores. 
The  Price  Section  of  the  War  Industries  Board  has  on  file  the  vrholeiale  market  quotations 
by  months  from  January,  191.?,  to  December,  191S,  on  about  one  himdred  grades  of  light  hard- 
ware. 

The  Price  Section  has  also  issued  a  bulletin,  Comparison  of  Prices  Diu-Lng  the  Civil  War 
and  the  Present  War. 

5.  Bulletins  of  the  United  States  Forest  Service. 

Some  Economic  Aspects  of  the  Lumber  Industry,  by  William  S.  Greeley, 
United  States  Forest  Service  Bulletin  No.  114. 

Treats  of  the  organization,  the  value  of  lumber  products  and  lamiK-r  costs,  foreign  trade, 
etc. 

The  Export  Lumber  Trade  of  the  L^uited  States. 

Handbook  of  suggestions  for  developing  foreign  commerce  and  study  of  the  present  needs 
and  future  possibilities  of  extending  the  lumber  industry  in  foreign  markets. 

6.  Bulletins  of  the  War  Ti-ade  Board. 

Effect  of  War  on  the  Glass  Industry  of  the  World.     (With  tables.) 

Lumber  Production,  Plant  Capacity,    Labor   Situation,    etc.,   in    the    United 

States. 
Steel:  Production  in  European  Countries  Since  1913. 
Lumber:  Effect  of  War  on  the  World  Situation. 
Iron  and  Steel  Products:  Exports  to  Allies,  Neutrals,  and  Ct- nt.ral  Power.3  and 

to  Acti\e  Belligerents,  to  Europe  and  to  the  Worid,  1912-1918. 

7.  liullotins  of  the  Federal  Trade  Commission. 
Hemlock  and  Hardwood  Lumber. 

Cost  accounting  s(  iidy. 

Building  Hardware. 

Cost  accounting  study.  , 


ECONOMICS   OF   THE   CONSTRUCTION   lUDUSTBY.  251 

II.  Government  Publications — Continued. 

8.  Bulletins  of  the  Tariff  Commission. 

The  Glass  Industry  as  Affected  by  the  War. 

127-page  report.  A  comprehensive  report  coveriru;  production,  coosimiption,  imports, 
exports,  wages  of  labor,  and  other  data  on  all  kind?  of  glass  product^.  Data  covers  j>erir>.l 
thiough  1917. 

9.  Bulletin  of  the  Census  Bm-eau  of  the  Department  of  Commerce. 
Statistics  of  Iron  and  Steel  Products. 

The  tables  present,  in  detail,  the  quantities  in  the  hands  of  manufacturers  of  .specified  iron 
and  steel  products,  and  also  of  dealers  and  manufacturers  consuming  iron  and  steel  produc!  s. 

III.  Periodicals. 

1.  Dun's  Review. 

Gives  weekly  report  of  wholesale  prices,  in  most  cases  for  the  Xe-sv  York  market,  on  brick, 
cement,  lathe,  lime,  shingles  (cypress  No.  1),  lumber,  hemlock,  white  pine,  oak  (plain),  oak 
(white  quartered),  red  poplar,  white  ash,  beech,  birch,  chestnut,  cypress,  mahogany,  maple, 
spruce,  yellow  pine,  cherry,  basswood.    Also  steel,  rosin,  tar,  turpentine,  linseed  oil,  paints. 

Also  publishes  monthly  index  of  wholesale  prices  for  all  commodif  ios,  but  no  index  on  btTiMing 
materials. 

2.  Bradstreet's. 

Gives  weekly  report  of  wholesale  prices,  in  most  cases  for  New  Yfirk  market,  on  bnck,  lime, 
cement,  wire  nails,  window  glass,  yellow  pine  (12  inches  and  underV  timber  (eastern  spruce;), 
timber  (hemlock),  linseed  oil,  rosin,  turpentine,  tar,  steel  products. 

Gives  index  of  wholesale  prices  covering  9<i  commodities.  This  includes  an  index  for  a  build- 
ing materials  group,  which,  however,  is  not  very  comprehensive,  only  eight  commodities  Ijeing 
included. 

3.  The  Iron  Age.     Xew  York,  The  Iron  Age  Publishing  Co.     Weekly. 

Gives  weekly  quotations  and  market  reviews  on  iron,  steel,  and  other  metal  products,  and 
also  production  figures  from  time  to  time.     Very  complete  and  thoroughly  reliable. 

4.  The  Iron  Age.     Annual  Review  Number,  January  2,  1919. 

Gives  a  number  of  price  series  on  iron  and  steel  products,  covering  a  period  of  22  y<>ar::. 

5.  The  Iron  Trade  Review.     Cleveland.     The  Penton  Publishing  Co.     Weekly. 

Gives  weekly  quotations  on  all  iron  and  steel  products,  as  well  as  prices  on  other  melals.  Also 
gives  freight  rates  on  ores  and  finished  products,  and  production  statistics  from  time  to  time. 

6.  The  American  Iron  and  Steel  Institute,  Xew  York. 

Compiles  and  publishes  all  kinds  of  statistical  information  concerning  the  iron  and  steel  indus- 
tries, and  production,  imports,  and  exports,  etc. 

7.  Engineering  News-Record.    New  York.    The  McGraw-Hill  Co.  (Inc.).  Weekly. 

Gives  in  the  first  issue  of  eacli  month  wholesale  prices  for  a  number  of  markets  on  inm  and 
steel  products,  Including  metal  lath  and  reinforcing  bars,  railroad  t  ies,  road  and  paving  materials, 
sand,  gravel,  crushed  stone,  lime,  cement,  brick,  hollow  tile,  drain  and  sewer  pipe,  prepared 
roofings,  !Ln.seed  oil,  white  and  red  lead,  lumber,  and  contractors'  miscellaneotis  supplies. 

8.  American  Contractor.     Chicago.     The  American  Contrar-tor  Pii')lif:hiii?  Co. 
Weekly. 

Contains  weekly  quotations  for  various  markets  on  lumber,  Portland  cemeni,  cimtiiou  I>riclc, 
andiron  and  steel  products. 

9.  Building  Supply  News.     Chicago.     Kenfield-Leach  Co.     Monthly. 

Gives  prices,  delivered  on  the  job,  of  5ti  basic  building  materials  fi)r  72  markets. 

10.  Rock  Products.     Tradespresa  Publishing  Corporation.     Chicago.     Published 
every  other  Wednesday. 

Gives  quotations  for  a  number  of  markets  on  agricultural  limestone,  crushed  stone,  sand,  and 
gravel.    Publishes  occasional  statistical  information  on  these  products. 

11.  Oil,   Paint,  and  Drug    Reporter.     New  York.     The  Oil,   Paint,  and   r>rug 
Reporter  (Inc.).     Weekly. 

Gives  weekly  quotations  for  New  York  market  on  all  kinds  of  paint  and  varnish  materials, 
including  oils,  gums,  pigments,  naval  stores,  etc.    Also  gives  quotations  on  window  glass. 


252  ECONOMICS   OF   TiriO   CONSTRUCTION   INDUSTRY. 

11 F.     rKitionicALS — Continued. 

\'2.  Oil,    Paint,   aii<l    Dni;^:    llcpijilcr,    J!)l«   Yearbook.     Oil,    Paint,    and    I)rng 

lleporter  (Inc.). 

"A  completf^  t;il)ular  prcsoutiition  of  production,  distribution,  prices  of  commoditips,  imports 
and  exports,  in  tho  Reporter  markets  with  abstracts  of  legislation  affecting  the  same,  together 
with  price  comparisons  since  tho  beginning  of  the  war,  August,  1014,  to  December,  1018,  inclusive; 
as  W(^I1  as  related  matter  having  to  do  with  tho  changes  incident  to  the  conduct  of  business  in 
war  time  and  tho  development  of  new  industries  to  meet  war-time  demands,  with  special  analyses 
of  tho  movement  of  tho  more  important  comraodit  ies,  and  a  general  r^snm(5  of  all  markets  which 
tho  Reporter  represents." 

13.  Liimbei'.  Manufacturcra  and  Dealers  Kdilion.  The  Journal  of  Conamerce 
Co.     St.  Louis,  Mo, 

Quotations  (m  lumber. 

14.  American  Lumberman.     Chicago,  111.     "\\'eekly. 

rdves  review  of  current  market  condition-s.    Current  prices. 

15.  Southern  Lumberman.     Published  weekly. 

Editorial  comment  on  market  conditions.    Market  reports. 

16.  Commercial  Bulletin.     Boston. 

Quotations  on  lumber  from  the  Boston  market. 

17.  Other  joiu-nals  giving  prices  are: 
On  Paints,  Naval  Stores,  etc. — 

American  Paint  JoiU'nal. 
Journal  of  Commerce. 
Naval  Stores  Review. 
Di-ugs,  Oils,  and  Paints. 
On  Iron  and  Steel  Products — 
Hardware  Age. 
Journal  of  Commerce. 
American  Machinist. 
"Waste  Trade  Journal. 

II.  LABOR  AND  WAGES  IN  THE  CONSTRUCTION  INDUSTRY. 

The  Bureau  of  Labor  Statistic.«i. 

1.  The  Bureau  of  Labor  Statistics  is  the  nucleus  around  which  the  Department  of 
Labor  itself  has  been  built  up.  Its  present  functions  are  almost  wholly  gtatis- 
tical  and  educational. 

The  Monthly  Labor  Review. — The  Monthly  Labor  Review,  formerly  The 
Monthly  Review,  begun  in  July,  1915,  is  the  principal  publication  of  the 
bureau.  In  the  three  years  of  its  existence  it  has  come  to  be  recognized  as  the 
authoritative  publication  dealing  with  matters  of  current  interest  relating  to 
industry.  It  gives  information  concerning  the  current  work  of  the  Bureau  of 
Labor  Statistics  and  of  other  bureaus  of  the  Department  of  Labor,  and  al?o  the 
work  of  other  Government  agencies  dealing  directly  with  labor  matters. 
Special  articles  and  brief  reports  of  original  investigations  appear  in  its  i.-sues. 
Statements  of  the  employment  and  conciliation  work  of  the  department  and 
statistics  on  immigration  are  printed  each  month.  Reviews  of  the  work  of 
State  labor  bureaus,  workmen's  compensation  commissions,  minimum  wage 
commissions,  and  arbitration  boards  are  given,  together  with  information  con- 
cerning the  legislation  of  Congress  and  of  the  several  States,  and  summaries 
and  analyses  of  important  court  decisions  relating  to  lal)or.  Retail  and  whole- 
sale i)rices  of  commodities  appear  each  month,  and  various  phases  of  the  labor 
situation  in  this  and  foreign  countries  as  affected  by  the  war  arc  considered  in 
detail.     Up-to-date  information  as  to  the  various  Government  war  boards  and 


ECONOMICS    OF    THE    CONSTRUCTION    INDUSTRY.  253 

The  Bureau  of  Labor  Statistics — Continued. 

bureaus  dealing  with  lalxT  mat  tors  and  their  per~onnf4  and  work  i<  puLlinhcd 
ear-h  month. 

"  Frequent  reference  is  made  to  the  annual  and  biennial  reports  of  the  various  state  Depart- 
ments of  Labor.  Copies  of  all  State  reports  are  on  file  in  the  library  of  the  United  States  Depart- 
ment of  Labor.  In  addition,  the  Bureau  of  Labor  Statistics  receives  many  unpublished  State 
reports  which  appear  in  the  Monthly  Labor  Review  published  by  the  Bureau.  For  this  reason 
the  Bureau  of  Labor  Statistics  is  frequently  given  as  the  source  of  statistical  information  which 
has  its  origin  in  the  various  State  departments. 

"  ^Vhen  statistical  reports  are  issued  periodically  by  any  agency,  the  data  in  the  last  report 
has  been  listed.  Special  Reports  of  the  Federal  Government  running  back  to  1910  are  listed 
but  special  State  reports  are  not  included." 

A  List  of  Labor  Statistics  Issued  by  the  Statistical  Ci.earinc  House,  Cextral 
Bureau  oii*  Planning  and  Statistics. 

2.  This   bibliography   contains   material    under   the   I'dllnwing   h(>ading.=  : 

Accident  Compensation  and   In-                Labor  Costs. 

eurance.  Labor  Demand  and  .'^upply. 

Accidents.  Labor  Organizations. 

Cost  of  Living.  Occupational  Diseases. 

Disputes  and  Settlements.  Productivity  of  Labor. 

Employment.  Unempli  lynient. 

Employment  Agencies.  Vocational  Education. 

Factory  Inspection.  Wages. 

Hours  of  Labor.  Welfare  Work. 
Housing. 

3.  Wages.  Fifteenth  Annual  Report  of  the  I'nited  States  Commissioner  of  Labor. 
Wages  and  Hours  of  Labor  from  18 —  to  1900.     Washington. 

"  In  order  to  answer  the  very  numerous  demands  for  information  relative  to  the  rates  of  wages, 
hours  of  labor,  etc.,  the  department  undertook,  nearly  seven  years  ago,  the  com]iilatiou  of  such 
information  for  the  commercial  countries  of  the  world  *  *  *  The  present  compilation 
includes  the  lowest,  highest,  and  average  rates  of  wages  per  day  and  hours  per  week  for  the 
United  States,  and  the  lowest  and  highest  rates  and  hours  for  foreign  countries.  It  gives  quo- 
tations for  each  country  as  far  back  as  any  definite  official  statement  was  to  be  found,  and  the 
quotations  come  down  to  the  present  year  (1900)." —  Carroll  D.  Wright. 

4.  ■ — .     Xineteemh  Annual  Report  of  the  Ignited    States    Cnmmi.'^sion)  r  oi 


Labor,  1904.     Wages  and  Hours  of  I-abor,  1890  to  1903. 

"The  present  volume,  the  Nineteenth  Annual  report  of  the  Bureau  of  Labor,  presents  the 
results  of  an  extensive  investigation  info  the  wages  and  hours  of  labor  in  the  leading  manufactur- 
ing and  mechanical  industries  of  the  United  States  during  the  periodfrom  1890  to  1903,  inclusive." 

5.  United  States  Department  of  Labor,  Bureau  of  Labor  Statistics — 

{(i)  Bulletin  131.  Union  scale  of  wages  and  hours  of  labor  for  1907-1912. 

{b)  Bulletin  143.  Union  scale  of  wages  and  hours  of  lalior  for  1913. 

(r)  BidletinlTl.  Same  for  1914. 

{(!)  Bidletin  194.  Same  for  1915. 

(0  Bulletin  214.  Same  for  1916. 
G.  The  scale  of  wages  for  1917  has  not  yet  l)een  published.     The  Monthly  Labor 

Review  for  September,  October,  and  November,  1918,  give  the  union  pcale  of 

wages  and  hours  of  labor  for  1918.     The  scale  of  wages  and  hours  of  labor  for  the 

years  1904  to  1906,  inclusive,  are  not  available. 
7.  Fniploijecs  and  War/( x.      Washington,  100 1. 

Special  report  made  for  the  Twelfth  Census  under  the  direction  of  rri.f.  Travis  R.  Dewey, 
and  known  as  the  Dewey  Report.  It  is  a  comprehensive  study  of  classified  wa;;e  rates  for  the 
years  1890  and  1900.  Do?s  not  contain  wage  rates  of  building  tradesmen;  "ihe  inquiry  was 
limited  to  34  industries,  nearly  all  of  a  permanent  character,  which  are  not  violently  affected  by 
seasonal  influences.' 


254  ECONOMICS   f>F   THIO   (•ONSTRUCTION   INDUSTRY. 

A  List  of  Lauur  Statistics,  etc. — Continued. 

8.  Tho  minimum  scale  of  ■wagf'3  in  the  l:»uiicUiig  liudes  on  the  eight-hour  Jjasifl  ig 
also  contaiuod  in  the  annual  reports  of  the  i)roceeding8  of  the  Building  Trades 
Diipartmeut  of  the  American  l-'cdcration  of  Labor.  The  report  for  1918  con- 
tained, for  example,  the  minimum  scale  in  i  14  different  cities. 

9.  Wages  and  the  War,  a  summai  y  of  recent  wage  movements,  by  Hugh  S.  Hanna 
and  W.  Jett  Lauck.     Cleveland,  Ohio,  1918. 

Contains  a  mass  of  material  on  wages  in  various  trades  for  the  years  1911-1917;  in  some  trades 
the  year  1907  is  added.  It  contains  numerous  charts  and  tables  showing  the  per  cent  of  increase 
of  rates  prevailing  in  Pcccmlx'i-,  1917,  over  1914  and  over  I'.tll. 

Pages  3j~47  contain  the  rate  of  increase  of  building  vage  rates  prevailing  I)ec-ember,  1917, 
over  those  prevailing!  n  1914  and  1911. 

Pages  1.59.222  contain  the  union  rates  of  jiay  in  the  building  trades  in  large  cities,  1907-1917. 

Cost  of  Living. 

10  (a).  The  Bureau  oi  Labor  Statistics  gathers  data  on  the  cost  of  living  which 
it  publishes  in  the  Monthly  Labor  Review.  Increases  in  the  cost  of  living 
from  December,  191 4,  for  shipbuilding  districts  are  contained  in  this  Re^-iew. 
The  increases  for  many  other  cities  are  also  published  in  it. 

Under  the  caption,  Prices  and  the  Cost  of  Living,  this  bureau  publishes  each  month  com- 
prehensive data.    The  Decemljer,   1918,  issue  of  the  Monthly  Labor  Review,  for  example, 
contains  the  following  material: 
Prices  and  cost  of  living  — 

Retail  prices  of  food  in  the  United  States. 

Retail  prices  of  dry  goods  in  the  United  States. 

Price  changes,  wholesale  and  retail,  in  the  United  States. 

Index  numbers  of  wholesale  prices  in  the  United  States,  191.3  to  October,  191*?. 

Changes  in  wholesale  prices  in  the  United  States. 

"Wholesale  prices  in  the  L'nited  States  and  foreign  countries,  1890  to  September,  191S. 

Consumption  of  food  in  shipbuilding  districts. 

Index  numbers  of  wholesale  prices  published  by  the  Federal  Re.serve  Board. 

New  cost  of  living  regulations  in  Canada. 

Food  prices  in  Great  Britain. 

Increase  in  the  cost  of  living  in  Sweden  from  1914  to  tlie  end  of  July,  191S. 

(b).  Cost  of  Living  and  the  War,  an  analysis  of  recent  changes,  by  W.  Jett  Laiu^k. 
Cleveland,  Ohio,  1918. 

"This  volume  is  a  summarization  and  analysis  of  ofTicial  and  authoritative  data  bearing 
upon  the  cost  of  living,  with  special  reference  to  the  families  of  wage  earners."  It  contains  also 
a  bibliography  of  publications  on  the  cost  of  living. 

(c).  The  Possibility  of  Compiling  a  Cost  of  Living  Index,  by  Royal  Meeker, 
United  States  Commissioner  of  I>abor  Statistics.  Monthly  Labor  Re\-iew, 
March,  1919. 

Tills  article  is  an  analjsis  of  the  questions  connected  with  the  compilation  of  the  cost  of 
living  index.  The  plans  of  the  Bureau  of  Labor  Statistics  for  iXTfectiug  and  completing  the 
cost  of  living  surveys  arc  described  by  Commissioner  Meeker. 

(d).  The  National  Industrial  Conference  Board,  a  cooperative  body  cc)m])osed  of 
representatives  of  national  and  industrial  associations,  publishes  in  Boston 
reports  on  changes  in  the  cost  of  living.  It  pid)lished  two  reports  on  the  war- 
time changes  in  the  cost  of  living;  one  in  August,  191S.  and  the  other  in  Feb- 
ruary, 1919. 

11.  Building  Tradesmen,  whose  organization  in  1918  comprised  635,380  inem- 
])ors,  record  their  activities  in  the  annual  reports  of  the  Building  Trades  Depart- 
ment of  the  American  Federation  of  Labor.  These  reports  contain  a  list  of 
officers  of  the  Building  Trades  Department,  its  constitution,  the  decisions  with 
regard  to  jurisdictional  disputes,  the  proceedings  of  the  annual  conwntions, 
reports  of  officers  and  etatistics  with  regard  to  membership  and  annual  wage 
scales. 


ECONOMICS   OF   THE   COXSTRUCTIO^'   I'N'DUSTRY.  255 

in.  SOURCE  AND  SUPPLY  OF  CAPITAL  FOR  THE   CONSTRUCTION 

INDUSTRY. 

I.  GOVERXMEXT   PUBLICATION'S. 

1.  Annual  reports  of  the  Comptroller  of  the  Currency.     Government  Printings 
Office,  Washington,  D.  C. 

These  reports  contain  statistics  ol  the  resources  of  banks  of  all  classes  and  of  trust  companies 
of  the  United  States,  including  the  amount  of  loans  secured  by  real  estate  and  mortgages  owned. 
The  value  of  these  reports  in  respect  to  real  estate  loans  is  diminished  by  the  fact  that  since  191i>, 
the  statistics  of  real  estate  loans  are  not  comparable  wiih  the  earUer  figures.  Up  to  1910,  the 
Comptroller  of  the  Currency  compiled  real  estate  loan  statistics  from  individual  r.' ports  of  thd 
different  classes  of  banks  of  the  country.  Since  1916,  the  comptroller  lia5  received  individual 
reports  only  from  national  banks  and  has  compiled  the  statistics  for  other  classes  of  banks 
from  the  State  banking  reports.  Inasmuch  as  all  the  State  banking  reports  do  not  segregate 
real  estate  loans  from  other  bank  resources,  any  compilation  of  real  estate  lotins  based  on  State 
banking  reports  will  be  incomplete. 

2.  Reports  of  State  Banking  Departments. 

The  banking  departments  of  the  different  States  issue  annual  reports  on  banking  institutions 
reporting  to  them.  These  reports  are  of  uneven  quality.  The  most  useful  of  the  State  banking 
department  reports  are  those  of  New  York.  They  contain  considerable  iiiCormation  on  real 
estate  loans  of  New  York  banking  institutions  under  State  control  and  these  represent  about 
one-sixth  of  the  banking  resources  of  the  United  States. 

3.  Annual  Reports  of  the  Federal  Farm  Loan  Board.     Government  Printing 
Office. 

These  reports  contain  valuable  information  on  the  working  of  the  Federal  Land  Bank  System. 

4.  The  Federal  Farm  Loan  Act.     Sixty-fourth  Congress.     First  Session.     Senate 
Document  500. 

This  document  is  of  particular  interest  since  the  Federal  Farm  Loan  Act  is  the  model  of  fue 
proposed  Home  Loan  Bank  Act. 

5.  Hearings  before  the  subcommittee  of  the  Joint  Committee  on  Rural  Credits. 
Sixty-fourth  Congress,  First  Session. 

These  hearings  contain  a  mass  of  information  relating  to  mortgage  loans,  relating  more  par- 
ticularly, of  course,  to  rtu'al  mortgage  loans. 

6.  The  National  Bank  Act  as  amended,  the  Federal  Reserve  Act,  and  other  hiwa 
relating  to  national  banks,  Sixty-fourth  Congress,  First  Session.     Document  412. 

7.  The  Federal  Reserve  Bulletin  issued  monthly  by  the  Federal  Reserve  Board, 
Washington. 

This  bulletin  contains  much  very  valuable  information  on  the  general  financial  conditionsof 
the  country  and  in  particular  on  the  rate  of  interest. 

II.  Books. 

1 .  W.  H.  Kniffin,  jr.,  T!ie  Savings  Bank  and  its  Practical  Work. 

This  book  contains  considerable  information  on  real  estate  loans  of  savings  banks  and  how 
they  are  managed. 

2.  Edward  D.  Jones,  Investment. 

This  book  contains  some  valuable  material  on  mortgage  loans  as  investments,  including  a 
detailed  analysis  of  41  considerations  which  the  assessors  of  Philadelphia  are  askod  to  take  ini-* 
accoimt  in  making  valuations. 

3.  Hardy  and  Lindner,  Insurance  and  Real  Estate. 

4.  Frank  A.  Fetter,  Moden  Economic  Problems. 

This  book  contains  a  compact  and  u.sehil  account  of  building  and  loan  associaticmsrelnt.in^ 
particularly  to  their  methods  (pp.  1.56-101 1. 

5.  Loans  and  Discounts:  Shaw  Banking  Series. 

Among  other  material  on  real  estate  loans,  this  book  contains  a  description  of  a  plan  ofbank 
loans  to  home  Iniildeis,  providuig  for  repayment  on  the  installment  plan  (p.  233). 

G.  S.  S.  Huebner,  Life  Insurance. 

This  book  contains  information  on  mortgage  loans  as  invesimentsoiliio  insurance  compauiea. 


256  ECONOMICJS    OF   TJTK    CONSTRUCTIOX    INDUSTRY. 

I  IT.    MiSCKI.LAN'KOU.S    RkFEREVCES. 

1.  T'nx'oodini^s  of  the  Annual  Convention  of  the  United  States  League  of  l/ocal 
Building  and  Loan  Associations.  American  Building  Assr^ciation  News, 
Cincinnati,  Ohio. 

In  addition  to  much  other  iis(!ful  rauttcr  on  building  and  loan  associations,  these  proceedings 
C)nl-;iin  statist  ics  on  the  real  estate  loans  made  during  each  yoar  and  on  the  total  assets  held  by 
building  and  loan  associations  in  the  United  States. 

2.  The  Insurance  Yearbook,  Spectator  Co.,  New  York. 

This  yearbook  contains  voliuninons  statistics  on  life  insurance  companies  in  I  he  United  States, 
including  an  itemized  list  of  the  assets  of  all  of  the  leading  companies. 

3.  Annual  financial  statements  of  the  various  life  insurance  companies. 

These  small  pamphlets  may  be  had  annually  upon  application  to  the  different  life  insurance 
companies.  Most  of  them  give  the  amount  of  mortgage  loans  in  the  itemized  list  of  assets. 
These  little  statements  are  available  before  the  same  information  is  published  m  the  Insurance 
Yearbook. 

4.  K.  V.  Haymaker,  Home  Building  and  Citizenship,     Address  delivered  at 

Detroit,  Mich.,  and  published  by  the  American  Building  Association  News, 
Cincinnati,  Ohio,  in  pamphlet  form  in  1918. 

Contains  a  short  description  of  building  and  loan  association  methods. 

5.  Tentative  Draft  of  a  Bill  to  Promote  Home  Building,  Issued  by  the  United 
States  Department  of  Labor,  Di^dsion  of  PuIjHc  Works  and  Construction 
Development. 

Tliis  biO  if  passed  by  Congress  will  provide  a  system  of  Federal  Home  l>oan  Banks  modeled 
upon  the  Federal  Land  Bank  system. 

6.  Home  Loan  Banks  LTrged  to  Stimulate  Building  Operations.  Annalist, 
February  3,  1919. 

This  article  in  the  Amialist  advocated  a  new  law  to  enable  an  increase  of  mortgage  credit 
that  the  treasuries  of  building  and  loan  associations  depicted  by  investments  in  Govcmment 
bonds  might  be  replenished  to  meet  the  demands  of  peace  reconstruction. 

7.  Real  Estate  Record  and  Builders'  Gtiide  has  occasional  articles  on  real  estate 
loans.     The  following  may  be  noted  as  of  particular  interest. 

(a)  A  Discussion  pro  and  con  of  the  Torrens  Land  Title  Law  as  it  operates  in 

New  York.     In  the  issue  of  May  18,  1919. 

(b)  X  detailed  account  of  the  official  procedure  under  the  Torrens  Law  by 

James  A.  Donegan,  registrar  of  New  York  County  in  the  issue  of  June  1, 
1918. 

(c)  A  aiscussion  of  the  Gilchrist  Bill  which  provides  that  trust  bonds  in  New 

York  may  be  invested  in  parts  of  mortgages  held  by  title  and  guaranty 
companies.     In  the  issue  of  ^lay  11,  1918. 

8.  The  American  Bankers'  Association  has  gathered  by  means  of  a  questionnaire 
and  by  other  methods  a  consideral)le  mass  of  information  on  amortization  of 
real  estate  loans.  This  is  available  at  the  office  of  the  American  Bankers' 
Association,  5  Nassau  Street,  New  York  City. 

9.  The  Department  of  Agriculture  has  received  returns  on  a  ciuestionnaire  relating 
to  real  estate  loans  addressed  to  about  28,000  banks  and  Avill  soon  publish  the 
results. 

10.  The  American  Bankers'  Magazine,  contains  occasional  items  of  interest  relating 
to  real  estate  loans. 

11.  Annual  proceedings  of  the  National  Bankers'  Association.     These  proceedings 
contain  discussions  of  real  estate  loans  and  otlior  related  topics. 


ECONOMICS   OF   THE   CONSTRUCTION   INDUSTRY.  257 

IV.  BUILDING  AND  PUBLIC   WORKS. 

A.  Statistics  on  Building  Operations. 

1.  Statistics  of  building  and  engineering  contracts  awarded. 
(a)  The  American  Contractor.     F.  W.  Dodge  Co.,  New  York. 

Engineering  contracts  awarded  in  the  territory  east  of  the  Missouri  and  north  of  the  Ohio 
Rivers  have  been  published  in  this  periodical  since  January  1,  1910.  They  are  also  given  for 
each  of  six  districts  into  which  tliis  territory  is  divided.  The  statistics  for  the  New  England 
district  have  been  compiled  since  1901. 

2.  Statistics  of  building  permits. 

(a)  Clay-working  Industries  in  the  United  States  and  Building  Operations  in 
the  Larger  Cities.  United  States  Geological  Survey,  Department  of  the 
Interior. 

This  publication  is  a  chapter  of  the  volume  Mineral  Resources  of  the  United  States.  It 
Is  the  only  official  publication  of  building  permits  statistics.  About  144  cities  arc  included 
in  the  reports,  being  roughly  those  over  35,000  population.  The  number  varies  slightly  from 
year  to  year  on  account  of  the  failure  of  some  cities  to  make  a  complete  report.  Mr.  Jefferson 
Middleton,  of  the  Geological  Survey,  has  had  charge  of  this  compilation  for  a  number  of  years, 

(b)  Private  agencies.  The  American  Contractor,  Dun's,  Bradstreet's,  and  other 
agencies  also  compile  information  of  this  character. 

B.  Current  Building  Operations. 

1.  Notes  as  to  projects  contemplated  and  contracts  awarded  for  building. 
(a)  Trade  magazines. 

A  number  of  trade  magazines,  among  which  are  the  American  Contractor,  the  Architectural 
Record,  and  the  Real  Estate  Record  and  Guide,  all  published  by  the  F.  W.  Dodge  Co.,  of 
New  York;  The  American  Architect,  published  by  the  Architect  and  Building  Press,  Inc., 
New  York;  the  Manufacturers  Record,  Baltimore;  the  Engineering  News  Record,  New  York, 
and  the  Municipal  Journal,  New  York,  have  departments  in  which  up-to-dato  information 
Is  given  as  to  work  in  the  hands  of  architects  and  engineers,  bids  called  for,  and  contracts 
awarded. 

C.  Public  Works. 

1.  Census  reports. 

(a)  Financial  statistics  of  cities.  United  States  Census  Bureau  of  the  Depart- 
ment of  Commerce. 

(6)  Financial  statistics  of  States.  United  States  Census  Bureau  of  the  Depart- 
ment of  Commerce. 

These  annual  publications  give,  among  other  things,  the  "outlay"  for  cities  of  more  than 
30,000  population  and  for  all  States.  Outlay  means,  in  this  connection,  expenditures  that 
add  to  the  assets  of  the  city  or  State  concerned,  repairs  and  replacements  not  being  Included. 

2.  Reports  of  heads  of  executive  departments, 
(a)  Report  of  Secretary  of  State. 

(6)  Report  of  Secretary  of  Treasury. 

(c)  Report  of  Secretary  of  War. 

(d)  Report  of  Secretary  of  Navy. 

(e)  Report  of  Attorney  General, 
(/)  Report  of  Postmaster  General. 

(f/)  Report  of  Secretary  of  Agriculture. 

(h)  Report  of  Secretary  of  the  Interior, 

(t)  Report  of  Secretary  of  Commerce. 

(j)  Report  of  Secretary  of  I>abor. 

The  reports  of  the  Cabinet  members  include  reports  to  them  from  the  chiefs  of  bureaus  and 
other  services.  Many  of  these  subdivisions,  as,  for  example,  the  Supervising  Architect's  office 
in  the  Treasury  Department,  the  Engineering  Division  and  the  Construct  ion  Di\ision  in  the 
War  Department,  the  Bureau  of  Yards  and  Docks  in  the  Navy  Department,  the  Bureau  of 

121297°— 19 17 


258  ECONOMICS   OF   THE   CONSTRUCTION   INDUSTRY. 

C.  Public  Workh — Continued. 

2.  Reports  of  heads  of  executive  departments — Continued. 

Public  Roads  and  Rural  Engineering  in  the  Department  of  Agriculture,  the  Reclamation 
Service  and  the  Bureau  of  Indian  Affairs  in  the  Department  of  the  Interior,  the  Lighthouse 
Service  and  the  Life  Saving  Service  in  the  Department  of  rommerce,  and,  since  organized, 
the  United  States  Housing  Corporation  in  the  Department  of  Labor,  all  have  a  considerable 
amount  of  construction  in  their  charge,  and  their  respective  reports  give  information  as  to 
what  is  being  done  in  this  line  by  the  Federal  Government. 

V.  HOUSING. 

A  selected  bibliography  of  industrial  housing  during  and  after  the  war  in  America 
and  Great  Britain  has  been  prepared  for  the  United  States  Housing  Corporation 
by  Miss  Theodora.  Kimball,  consulting  librarian  for  the  United  States  Housing  Cor- 
poration, under  the  direction  of  Dr.  James  Ford,  manager  of  the  Homes  Registration 
and  Information  Di\dsion. 

It  contains  a  selection  of  250  of  the  more  important  references  from  1,000  or  more 
books,  articles,  and  pamphlets  issued  on  this  subject  during  the  period  of  the  war 
and  made  up  of  the  following  sections: 
General. 
Housing  Agencies: 

Government:  Federal — State  and  Municipal. 
Private  Capital:  Industrial  Corporations — Cooperative  Societies. 
War  Emergency  Problems:  Labor  and  Housing,  Labor  Turnover — Real  Estate 
Acquisition  and  Commandeering,  Requisitioning,  and  Billeting — Registration 
Bureaus  and  Room  Renting — Landlord  and  Tenant  Relations,  Rent  Profiteer- 
ing— Transportation . 
Planning    and    Development    of    HousixVG    Schemes:    General — Technical 
Methods  of  United  States  Government  Designers — Housing  Standards — Tv-pes 
of  Community  Development — Construction  of  Housing  Schemes. 
Houses:  House  Types  and  Types  of  Construction:  House  Types — Building 

Materials  and  Types  of  Construction. 
Home  Ownership  and  Management  Problems:  Home  Ownership — Renting 

and  Management — Special  Community  Facilities. 
Housing  Finance:  General — Governmental  Aid. 
Land  Values  and  Taxation. 
Brief  comments  are  submitted  with  the  more  important  articles. 


INDEX. 


Page. 
Advancing  prices 80 

Agriculture  commodities,  production  of 31 

American  Federation  of  Labor 177, 179 

Apartments,  rents  on.    See  Rents  on  apart- 
ments. 
Asplialt,  prices  of.    See  Prices. 
Australia,  prices  in 55 

Bars,  steel,  prices  of.    See  Prices. 

Basic  building  materials,  price  indices  on  . . .  42-46 

Bethlehem  Steel  Corporation 181 

Brick,  cost  of  production  of Ill,  112, 115, 117 

decline  in  importance  of 110 

prices  of.    See  Prices. 

prices  fixed  by  "War  Industries  Board  . . .  115, 116 

production  of.    See  Production. 

sand-lime 113-114 

Building  and  loan  associations.  205, 208, 209, 221, 222 
Building  materials,  pricesin  Great  Britain...       56 

prices  In  Scotland 56 

prices  after  the  Civil  TVar 76 

prices  during  the  Civil  TVar 77 

Building  stone.    See  Stone,  building. 

Building  trades 177,178 

elHciencyof 188,189 

imion  wage  scale  in 182, 183 

Business  conditions,  spring  of  1919 24, 25 

Business  rents.    See   Rents   of  stores   and 

offices. 

Canada,  prices  in 54, 55 

Cedar,  stands  of 91 

Cement  .natural  and  puzzolan 137, 138 

Portland,  cost  of  production  of 140-145 

freight  rates  on.    See  Freight  rates. 

imports  and  exports  of 138 

indices  on.    See  Prices. 

price  fixing 139 

prices  of.    See  Prices, 
production  of.    See  Production. 

regional  production  of 138 

Circulating  medium,  inflation  of 21 

Civil  War  prices.    Sec  Prices,  Civil  "War. 

Clay  products,  imports  and  exports 110,111 

prices  and  price  indices.    See  Prices, 
production.    See  Production. 

regional  production  of 112 

relative  importance  of 110,  111 

Commodities,    all,    price    indices    on.    See 
Prices. 

Competition  in  lumber  industry 93 

Concrete,  reinforced,  building,  cost  of 86 

Construction,  cost  of.    See  Cost  of  construc- 
tion, 
deferred.    See  Deferred  construction, 
recent 15 


Page. 

Consumer's  goods,  demand  for 37 

Coal,  world  production  oL    See  Production. 

productionin  Great  Britain 123 

Coffee,  price  of 83 

Coke,  Connellsville,  prices  of.    See  Prices. 

Copper,  abnormal  stocks  of 83, 84 

prices  of.    See  Prices, 
production  of.    See  Production. 
Cost  of  buildings  (Tables  18, 19,  20)....  86,87,89,90 

Cost  of  construction 16 

frame  dwellings  (Table  18) 86,89 

hospitals 86 

indices 86 

office  buildings  (Table  19) 87, 89 

roads 87,88 

Cost  of  fuel 51 

ofUving 184-187 

of  production 31 

of  production  after  the  Civil  War 74 

reduction  of 33 

brick 113,114 

builders'  hardware 172, 173 

cement,  Portland 140,141 

glass 157-159 

gravel 148 

gypsum  products 173 

illuminating  glassware 159 

limestone 131 

lumber 98,99 

marble 132 

millwork 173 

plumbing  and  heating  materials 170, 171 

sand 148 

sanitary  porcelain 170 

slate 132 

steel 51 

stone,  crushed 148 

Credit,  contraction  of 23 

Credit  instruments 22 

Crushed  stone.    See  Stone,  crushed. 

Cypress,  stands  of 91 

Decline  in  prices 80, 81 

Deferred  construction  (Tables  96-104) 15,2-11 

bridges,  canals,  levees,  and  water  fronts  (Ta- 

ble97) 243 

city  halls,  fire  and  police  stations  (Tabic  9S) .  244 

hospitals,  homes, and  institutions  ( Table  99) .  24 4 

lighting  plants  (Table  100) 245 

misceUaneous  (Table  104) 247 

private  projects  (Table  96) 242 

railroads,  tracks,  and  stations  (Table  103). ..  247 

schools  (Table  101 ) 245 

sewers  ,streetimprovements,and  waterworks 

(Table  102) - 246 

Deferred  construction  questionnaire 242 

259 


200 


INDEX. 


Deposit  banking,  increase  of 2.3 

Dollar,  shrinkage  of  the 45 

Dun's  index  number  (Table  16) 80,81, 85 

Duration  of  building  loans 211 

Dwelling,  frame,  cost  of  (Table  18) 86,89 

Earnings.    Sec  Wages. 

ElRciency  of  labor 3.3, 188 

Electrical  supplies,  prices  of.    Sec  Prices. 

Emergency  Fleet  Corporation 180, 188 

England.    Sec  Great  Britain. 

Essential  industries 49 

Excess  profits 31 

Exports,  clay  products 110 

glass 156j  157 

linseed  oil '. 164 

lumber 103, 104 

slate 129 

stone 127 

Farm  products, priccindiceson.    See  Prices . 

Federal  Farm  Loan  Board 207,208 

Federal  Reserve  System 232, 233 

Federal  Trade  Commission 115 

Financial  institutions,  number  of,  in  New 

York  State  (Table  91) 224 

real  estate  loans  by  (Tables  8&-87, 89, 9S-95) .    216, 
217,220,221.225,226 

resources  of  (Tables  89,  90,  92) 221, 222, 224 

Fir,  Douglas,  prices  of.    See  Prices. 

standsof 91 

Fire  brick,  production  of.    See  Production. 

Foreign  prices,  conclusions  concerning 59 

Frame  dwellings,  cost  of 86 

France,  prices  in 55 

Freight  rates,  cement  (Table  56) 145 

gravel  (Table  62) 150, 153 

lumber  (Table  25) 101, 106 

pig  iron  (Table  27) 109 

road  material 88 

sand  (Table  62) 150, 153 

steel  (Table  28) 109,110 

stone,c>Tislaed  (Table  63) 150, 153 

Fuel  Administration Ill,  140, 174 

Fuel,  cost  of 51 

Glass,  cost  of  production  of 157-159 

production  of.    See  Production. 

prices  of.    See  Prices. 

imports  and  exports  of 156, 157 

world  shortage  of 157 

Glassware,  illuminating 159 

cost  of  production 159 

Glass  sand,  prices.    See  Prices. 

production  of.    See  Production. 
Gold,  flow  of 21 

reserve 20, 21 

supply 20 

Government-fixed  prices,  brick 115 

cement 140 

lumber 93, 98 

steel 49, 50 

Granite,  importance  of 126 

prices  of.    See  Prices. 
Gravel,  cost  of  production  of I4S,  149 

freight  rates  on.    See  Freight  rates. 

prices  of.    See  Prices. 

production  of.    See  Production. 


rago. 

(;ray  forgo  pig  iron 108 

fi  rcat  Britain,  decline  of  price  level  in 81 

prices  in 55, 56 

production  of  stone  in 128 

Gypsum  l)lock,  prices  of.    Sec  I'rices. 

Gypsum  products,  cost  of  production  of 173 

Hardware,  builders',  cost  of  production  of. . .  172 

Hardwood,  stands  of 91 

Keating  materials,  cost  of  production  of 170, 171 

prices  of.    See  Prices. 

Hemlock,  stands  of 91 

prices  of.    See  Prices. 

Ilospital  buildings,  cost  of 86 

Uouse  rents.    See  Rents. 

Housing  in  Great  Britain 56 

Hudson  Riverdistrict,  production  of  brick  in .  112 

Illinois  State  legislature,  investigating  com- 
mittee   102, 115, 141, 143 

Illuminating  glassware 109 

Imports,  clay  products 110 

glass 156, 157 

linseed  oil 165 

stone 127 

Industrial  Board  of  Department  of  Com- 
merce   50,80,93,98 

Inflation  of  circulating  medium 21,25 

Institutions,  financial.    See  Financial  insti- 
tutions. 

Insurance  companies 209 

Interest  rate  on  building  loans 210 

Iron  ore,  prices.    See  Pricey. 

production  in  United  States 29 

production  in  Great  Britain 128 

Labor  cost,  in  glass  industry 158, 159 

in  Iimiber  industry 100, 101 

in  steel  industry 61 

in  stone  industry 131 

Labor,  efficiency  of 94, 188 

of,  in  lumber  industry 101 

Labor,  representation  of,  in  management 34,35 

Labor  shortage  in  southern  pine  region 94 

Land  values,  increase  of 237, 238 

Lath,  metal.    Sff  Metal  lath. 

Lay wers'  Mortgage  Co 214 

Lead,  carbonate.    See  Lead,  white. 

prices  of.    See  Prices. 

production  of.    See  Production. 

stocks  of 83 

white,  prices  of.    See  Prices. 
Lime,  prices  of.    See  Prices. 

production  of.    See  Production. 

regional  production  of 130 

Limestone,  cost  of  production  of 131 

importance  of 126 

prices  of.    See  Prices. 
Linseed  oil,  imports  and  exports  of 164, 165 

prices  of.    See  Prices. 

production  of.    Su  Production. 
Living,  cost  of.    See  Coast  of  living. 
Loans,  Government,  foreign 22 

Government,  United  States 22 

realcstafe.    Src  Realcstate  loans. 
Lumber,  cost  of  production  of 98,99 

exports 103  , 

future  price  tendencies  of 102 


INDEX. 


261 


Page. 

Lumber,  labor  cost  of 100, 101 

prices  and  index  numbers  on.    See-  Prices, 
production  of.    See  Production. 

stands  of 91 

surplus  stocks  of 94 

transportation  costs  on.    See  also  Freight 
rates 101 

Lumber  industry,  competition  in 95 

importance  of 90 

operating  conditions  in 94 

Marble,  cost  of  production  of 132 

prices  of.    See  Prices. 
Metal  lath,  prices  of.    See  Prices. 

Mill  work,  cost  of  production  of 173 

Ministry  of  Reconstruction,  British 65, 66 

Money,  stock  of 21 

Mortgage  loans.    See  Real  estate  loans. 

Nails,  wire,  prices  of.    See  Prices. 

Natural  cement 137, 138 

National  War  Labor  Board.    See  War  Labor 

Board. 
Naval  stores,  prices  of.    See  Prices. 

Office  buildings,  cost  of  (Table  19) 87, 89 

Oil,  linseed.    See  Linseed  oil. 

Onions,  prices  of 83 

Operating  conditions  in  lumber  industry 94 

Overproduction,  probability  of 39 

Paints,  prices  of.    See  Prices. 

Paint  and  varnish  business  during  the  war . . .    162 

Painters  and  Decorators,  Brotherhood  of 178 

Panic  of  1873 75 

Pa\'ing  block,  prices  of.    See  Prices. 

Petroleum,  world  production  of.    See  Pro- 
duction. 

Pig  iron,  basic,  prices  of.    See  Prices. 
gray  forge,  prices  of.    See  Prices, 
freight  rates  on.    See  Freight  rates. 

Pigments,  prices  of.    See  Prices. 

Pine,  Norway,  Western  White,  and  Yellow, 
stands  of 91 

Pipe,  6-inch  cast-iron,  prices  of.    See  Prices. 

Plastering  of  Government  buildings 117 

Plumbing  materials,  cost  of  production  of .  170, 171 
prices  of.    See  Prices. 

Porcelain,  sanitary,  cost  of  production  of 170 

prices  of.    See  Prices. 

Portland  cement.    See  Cement,  Portland. 

Prices  and  price  indices,  aU  building  mate- 
rials (Tables  3, 14, 15) 46, 77 

all  commodities  (Tables  3, 6, 7, 14-17) 44- 

46,60,77,85 

asphalt  (Table  79) 171, 172, 176 

bars,  steel  (Tables  4, 9, 26) 52, 62, 108, 109 

barytes  (Tables  73) 167 

basic  building  materials  (Table  3) 42,44,46 

billets, 4-inch  (Table4) 52 

blanc  fixe  pulp  (Table  74) 168 

bone  black  (Table  70) 166 

brick 44 

common  (Tables  13, 29, 33-36, 40) 70, 

117,119-122,126 

fire  (Tables  39,40) 12.5, 126 

front  orface  (Tables  28,38,40) 110,124,126 

vitrified  paving  (Tables  29,38, 40). .  117, 124, 126 


Page. 
Prices   and    price   indices,   camauba   wax 

(Table  75) itiS 

casein  (Table  75) 168 

cement,  Portland  (Tables  13, 52-55) 45, 

46,70,138-140,143,144 

Chrome  green  (Table  70) 166 

chrome  yellow  (Table  70) .' 166 

clay,  china  (kaolin)  (Table  39) 125 

fire  (Table  39) 125 

clay  products  (Table  40) 113, 126 

coke,  Conucllsville  (Table  5) 51, 63 

construction  iron  and  steel  products  (Ta- 
ble 3) 46,108 

prices  indices,  construction  materials 15 

copper 83 

copper  wire  (Table  78) 175 

cost  of  construction 86, 87 

cypress  (Table  24) 106 

electrical  supplies  ( Table  78) 172, 173, 175 

farm  products  (Table  3) 44-46 

fir,  Douglas  (Tables  21,  23) 104,105 

galvanized  iron  (Table  9) 62 

glass  (Tables  65,  66) 157, 160, 161 

granite  (Tables  47,  48,  51) 131, 135, 137 

gravel  (Tables  57-59,  61) 147, 148, 151-153 

gum,  copal  (Table  75) 168 

kauri  (Table  75) 168 

gjT)sum  blocks 173 

heating  materials 170, 171 

hemlock  (Tables  22,  23) 105 

hoops,  steel  (Tables  4,  11) 52,66 

iron  ore  (Table  5) 51, 53 

iron  and  steel  products 44, 45 

lamp  black  (Table  71) 166 

lead 83 

red  (Tables  12,  72) 68,167 

sheet  (Table  78) 175 

sulphate  (Table  72) 167 

white  (Table  73) 163, 167 

lime  (Tables  13,  45,  50) 70,131,134,136 

limestone  (Tables  49,  51) 131,136,137 

linseed  oil  (Tables  12,  76) 68, 163-165, 169 

litharge  (Table  72) 167 

lithopone  (Table  72) 167 

lumber  (Tables  3,  24) 44-46, 96-98, 106 

marble  (Table  51) 137 

metal  lath  (Table  80) 172, 176 

mineral  aggregate  (Table  00) 141, 148, 152 

nails,  wire  (Tables  4.  11) 52,66,108 

naval  stores  (Table  79) 171, 172, 176 

oak  (Tables  22,  24; 105,106 

oc her  (Table  70) 166 

oil.  Cliina  wood  (Table  76) 169 

linseed  (Tables  12-76) 68, 163-1()5, 169 

.soya  bean  (Table  76) 169 

paint  materials  (Tables  70-74,  76)  163, 164, 166-169 

paint,  white  (Table  72) 167 

Paris  green  (Table  70) 166 

pigiron(Tables4,  5,  8) 49,52,53,01,108 

pine,  eastern  white  (Tables  22,  23) 105 

yellow  (Tables  21,  23) 97, 104, 105 

pipe,  C  I  6-inch  (Table  26) 108,109 

lead  (Table  78) .• 175 

vitrified  (Tables  35-37,  40) 121-123, 126 

plasterboard 173 

plates,  steel  (Tables  4,9) 52, 62 


2G2 


INDEX. 


Page. 
Prices  and   price  indices,  plumbing  mate- 
rials   170,171 

porcelain  sani Lary  (TaMo  77) 17U,  17 1 

I'russian  blue  (Table  71) 100 

putty  (Table  7-1) 163,108 

rails,  steel  (Tables  4,11) 52, 06 

rivets  (Table  20) 108,109 

roofing  materials  (Table  77) 45, 109, 174 

rosin  (Table  79) 171, 176 

sand,  building  (Tables  57-61) . . . .  147, 148, 151-153 

sand  glass  (Tables  64,  65) 157, 159, 160 

slieetstoel  (Tables  4,  10) 52,(4 

sbellac  (Table  75) 168 

shingles,  cedar  (Table  24) 166 

shelt ,  grooved  (Table  4) 52 

slate  (Tables  44,  49,  51) 131, 134, 136, 137 

solder  (Table  78) 175 

spruce  (Tables  22,  24) 105, 106 

steel 45,49-51,80,108 

Steel,  structural  (Tables  4,  9,  26) 52, 62, 109 

stone,  building  (Tables  49-51) 45, 131, 136, 137 

Stone,  crushed  (Tables  57, 60, 61).  148, 149, 151-153 

stone,  curbing  (Table  48) 131,135 

stone,  flagging  (Table  48) 131,135 

stone,  paving  (Table  48) 131,135 

tar,  pLae  (Table  79) 171,172,176 

tile,  hollow  building  (Tables  13, 35-37, 40) . .        45, 

70, 121-123 

tile,  ceramic  (Tables  39,  40) 125, 126 

tile,  drain  (Tables  37,  40) 123,126 

tin  plate  (Table  4) 52 

turpentine  (Tables  12,  74) 68, 163, 164, 168 

ultramarine  (Table  71) 166 

umber  (Table  71) 166 

varnish  (Tables  75,  76) 164, 168, 169 

Venetian  red  (Table  71) 166 

whiting  (Table  74) 163,168 

wire,  copper  (Table  78) 175 

wire,  plain  (Table  4) 52 

wire,  rods  (Table  4) 52 

zinc,  oxide  (Table  73) 167 

zinc,  sheet  (Table  78) 175 

Prices  after  the  Civil  "War 74 

Prices,  cause  of  rise 14 

Civil  War  and  World  War 73 

decline  of,  in  England 81 

expectation  of  falling 22 

Price  fixing 49,50,52,115,139,140 

Price  influences 19 

Prices  in  terms  of  gold,  Civil  War 74 

Pricelevel,  decline  of 80 

new 84 

Prices,  March,  1919,  and  March,  1918,  com- 
pared         84 

Price  readjustment SO 

Price  revolutions 20 

Prices,  stability  of 21, 22 

Principal  reduction  of  building  loans . .  210, 212, 213 
Production  cost.    See  Cost  of  Production. 

Produrtion  during  the  war 26 

Production  of  brick,  common  (Tables  29,30).      117 

fire  (Tables  30) 111,112,117 

front  or  face  (Table  29,  30) 117 

oraiunental  (Table  30) 117 

vitrified  (Tables  29,  30) 117 

Production,  cement.  Portland  (Table  52)..  138,142 
clay  products  (Tables  29-32) 110,111, 117, 118 


Page. 

Production,  coal  (Table  1) 27, 29 

copper  (Table  1) 27,29,83 

com(Tal)le2) 28 

cotton  (Table  2) 28 

glass  and  glass  sand  granite  (Tables  41,  43, 

64) 133,  l.'-)4-156, 159 

gravel  (Table  57) 146, 151 

iron  ore  (Table  1) 27,29 

lead  (Tables  1,  69) 27, 29, 161, 162, 10.5 

lime  (Tables  45,  46) 130, 134 

linseed  oil  (Table  67) 161, 105 

himber 93 

marble  (Table  41,  43) 133 

oats  (Table  2) 28 

petroleum  (Table  1) 27, 29 

pipe,  vitrified  (Table  31) 118 

pottery  (Table  32) 118 

rice  (Table  2) 28 

riprap  (Table  42) 133 

rosin 171, 172 

rubble  (Table  42) 133 

rye  (Table  2) 28 

sand  (Table  57) 146,  l.il 

sand-lime  brick 113 

slate  ( Table  44) 128, 134 

spelter  (Table  1) 27, 29 

steel 49, 50 

stone,  building  (Tables  41-43) 127, 133 

crushed  (Tables  42,  57) 133, 146, 151 

stove  lining  (Table  31) 118 

sugar  (Table  2) 28 

terracotta  (Table  31) 118 

tile,  building  and  drain  (Table  31) 118 

turpentine  (Table  68) 161,165 

whait  (Table  2) 28 

zinc  (Table  69) 161, 162, 165 

Production,  regional,  of  cement 138 

clay  products 112, 113 

gravel 146,147 

lime  (Table  46) 130,134 

sand 146,147 

slate 130 

stone 129,146,147 

Putty,  prices  of.    See  Prices. 

Puzzolan 137,138 

Questioimaire  on  deferred  construction 242-244 

on  real  estate 16,238,240 

on  rents 235-237 

Raritan  district,  production  of  biickin 112 

Rate  of  interest.    See  Interest,  rate  cf. 

Readjustment  of  prices 80 

Real  estate  loans  by  financial  institutions 

(Tables  85-S7,  89,  93-95) 16, 

17, 209, 210, 216-218, 222, 223, 225, 227 

Beal-estate  loans  compared  with  indices  of 
national  expansion  (Table  88) 220 

Real-estate  loans,  developments  during  1917 
and  1918 227 

Real-estate  loans,  improved  facilities  for 233 

marketability  of 227-231 

rediscount  of 227-231 

sources  of 216 

tax  exemption  on 233, 234 

Real-estate  questionnaire 238-240 


INDEX. 


263 


Reconstruction,  Ci^^l  War,  period  as  prece- 
dent         75 

European 21, 103 

Redwood,  stands  of 91 

Refractories ,  war-time  production  of Ill,  112 

Regional     production.       See     Production, 

regional. 

Renewals  of  building  loans 212 

Rents  and  land  values 16 

Rents  of  apartments 235-237 

of  houses 235-237 

of  stores  and  offices 237 

Restrictions  of  capital  supply 228 

Resources  of  financial  institutions  (Tables  89, 

90,  92) 209, 221, 222, 224 

Retail  prices  after  the  Civil  War 75 

Rivets,  prices  of.    See  Prices. 

Road  construction,  cost  of 87, 88 

Road  materials,  freight  rates  on.    Sfe  Freight 

rates. 
Roofing  materials,  cost  of  production  of 169, 170 

prices  of.    See  Prices. 
Rosin.    See  Prices  and  production. 

Sand,  cost  of  production  of 148, 149 

See  also  Freight  rates.  Prices  and  produc- 
tion. 
Sand  glass.    See  Glass  sand. 
Sanitary  porcelain.    See  Porcelain,  Sanitary. 

Sand- lime  brick,  cost  of  production  of 114 

production  of.    See  Production. 
Savings  bank.    See  Financial  institutions. 

Scotland,  prices  of  building  materials  in 56 

Shrinkage  of  the  dollar 45 

Slate,  cost  of  production  of 132 

exports  of 129 

See  also  Prices,  Production,  and  Produc- 
tion, regional. 

Softwoods,  stands  of 91 

Sources  of  real  estate  loans.    See  Real-estate 

loans,  sources  of. 
Spelter,  production  of.    See  Production. 

Spruce,  stands  of 91 

Standing  timber 91 

Steel,  labor  cost  of 51 

price  fixing  on 49,50,80 

prices  in  England  and  United  States 55 

See  also  Freight  rates.  Prices  and  produc- 
tion. 
Steel-frame  office  building,  cost  of  (Table  19) .  87, 89 

Steel  industry,  survey  of,  in  war  period 49 

Steel  schedule  of  March  20, 1919 84 


I 'age. 

Stone,  building,  cost  of  production  of 131 

imports  and  exports  of 127 

production  of  in  Great  Britain.    See  also 
Prices,    Production,    and    Production, 

regional 128 

crushed,  cost  of  production  of.  See  aha 
Freight  rates,  Prices,  and  Production..  148,149 

Tar,  pine,  prices  of.    See  Prices. 

Taxes,  reduction  of 31 

Tile,  hollow  building.    See  Prices  and  Produc- 
tion. 

Timber  stands 91 

Title  guaranty  and  trust  companies 206, 207 

Title  insurance  companies  of  New  York. . .  213, 214 

Torrens  system 214, 215 

Trades,  building.    See  Building  trades. 
Transportation  problems  in  lumberindustry.  94, 101 
Turpentine.    See  Prices  and  Production. 

Unemployment 178 

Unessential  industries 49 

Union  wage  scale  (Tables  81-84) . . .  178-185, 191, 201 

United  States  Employment  Ser\-ice 180 

United  States  Housing  Corporation 86, 180, 189 

United  States  Railroad  Administration  . . .  150, 229 

United  States  Shipping  Board 180, 185 

United  States  Tarifl  Commission 154 

Values,  land.    S^e  Land  values. 
Varnishes.    See  also  Prices. 

Wages  after  the  Civil  War 75, 164 

Wages,  indices  of 182-184 

in  building  stone  industry 131 

in  building  trades  (Tables  82-84) 183, 191,201 

Wages,  indices  of  in  construction  industry. . .       15 

glass  industry 158 

lumber  industry 100, 101 

New  York  State  factories  (Table  81) .  180, 181, 190 

Steelindustry 50, 51, 181 

Wage  rate  of  1919 187, 188 

Wages,  reduction  of 32 

Wage  scale,  union.    See  Union  wage  scale. 

AVaiting  policy  of  buyers 25 

War  Finance  Corporation 229 

War  Industries  Board 229 

War  Trade  Board 261 

\ATiite  lead.    See  Lead,  white. 
■VMiiting,  prices  of.    See  Prices. 

Yellow  pine,  prices  of.    Sec  Prices, 
stands  of 91 

Zinc,  production  of.    See  Production. 


o 


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